B-157770, DEC. 13, 1965
TO FOUR SQUARE TOOL AND DIE CO., INC. :
WE AGAIN REFER TO THE LETTER DATED SEPTEMBER 28, 1965, FROM
WASHINGTON INFORMATION AND INVESTIGATIVE COUNCIL, WHICH PROTESTS THE
AWARD OF A CONTRACT UNDER ARMY INVITATION FOR BIDS NO. AMC (A)
28-017-65-434 TO ANY BIDDER OTHER THAN YOUR COMPANY.
THE INVITATION, A 100-PERCENT SMALL BUSINESS SET-ASIDE ISSUED MAY 13,
1965, SOLICITED PRICES ON A QUANTITY OF 45,000 EACH, PLATE, RETAINER,
WITH BIDS TO BE OPENED AT 2 P.M., FRIDAY, JUNE 11, 1965, IN THE BID
OPENING ROOM, BUILDING NO. 10, PICATINNY ARSENAL, DOVER, NEW JERSEY. AT
THE TIME SET, THE 12 BIDS RECEIVED WERE OPENED AND IT WAS DETERMINED
THAT THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER WAS GENERAL PRODUCTS
MANUFACTURING CO., WITH A UNIT PRICE OF $0.172 AND A TOTAL CONTRACT
PRICE OF $7,740. YOUR BID, WHICH WAS LOWER THAN GENERAL PRODUCTS, WAS
MAILED REGISTERED, AIRMAIL, SPECIAL DELIVERY, AT THE BRAZIL, INDIANA,
POST OFFICE AT APPROXIMATELY 9 .M., JUNE 10, 1965, ARRIVED AT THE
PICATINNY ARSENAL CENTRAL MAILROOM AT 7:15 A.M., SATURDAY, JUNE 12,
1965, AND WAS NOT RECEIVED IN THE PROCUREMENT AND PRODUCTION
DIRECTORATE, BUILDING NO. 10, UNTIL AROUND 12:30 P.M. OR 1:30 P.M.,
MONDAY, JUNE 14, 1965. CONSEQUENTLY, THE CONTRACTING OFFICER ADVISED
YOU THAT YOUR BID, HAVING BEEN RECEIVED LATE, WOULD NOT BE CONSIDERED.
AWARD WAS NOT MADE UNTIL SEPTEMBER 15, 1965, IN ORDER TO ALLOW YOU AN
OPPORTUNITY TO FURNISH ADDITIONAL PROOF THAT THE BID HAD BEEN MAILED IN
SUFFICIENT TIME TO ARRIVE AT THE BID OPENING ROOM PRIOR TO THE TIME SET
FOR OPENING.
YOU HAVE SUBMITTED A STATEMENT FROM THE ASSISTANT POSTMASTER AT
BRAZIL, INDIANA, THAT THE BID WAS DISPATCHED FROM THAT OFFICE ON THE
EVENING OF JUNE 10, 1965, AND SHOULD HAVE REACHED DOVER, NEW JERSEY, THE
NEXT MORNING IF ALL CONNECTIONS OF AIR FLIGHTS WERE MADE ON SCHEDULE.
THE FILE ALSO CONTAINS A STATEMENT FROM THE POSTMASTER AT DOVER, NEW
JERSEY, THAT, ALTHOUGH THE BID ARRIVED THERE ON JUNE 12, 1965, UNDER
NORMAL CONDITIONS IT SHOULD HAVE ARRIVED AT DOVER AT 11:30 A.M., JUNE
11, 1965, AND IT SHOULD HAVE BEEN DELIVERED TO THE PICATINNY ARSENAL
BEFORE 2 P.M., JUNE 11, 1065. THUS, IT APPEARS THAT, UNDER NORMAL
CIRCUMSTANCES, THE BID FROM FOUR SQUARE SHOULD HAVE ARRIVED AT THE
ARSENAL'S CENTRAL MAILROOM PRIOR TO 2 P.M., JUNE 11, 1965, RATHER THAN
7:15 A.M., THE NEXT DAY. THE FILE ALSO CONTAINS A STATEMENT BY THE
CHIEF OF THE RECORDS AND MAIL SERVICES BRANCH AT PICATINNY ARSENAL THAT
MAIL ARRIVING AT THE DOVER POST OFFICE IS PICKED UP BY AN ARSENAL
DRIVER AT ABOUT 1:05 P.M. AND ARRIVES AT THE ARSENAL'S CENTRAL
MAILROOM, 5 1/2 MILES AWAY, BY :20 P.M. FURTHER, THERE IS NO PROCEDURE
FOR SPECIAL HANDLING OF REGISTERED MAIL ARRIVING AT THE DOVER POST
OFFICE AND ADDRESSED TO SEGMENTS OF PICATINNY ARSENAL. AFTER THE MAIL
IS RECEIVED AT THE ARSENAL'S MAILROOM, IT IS SORTED, PROCESSED AND EACH
PIECE OF REGISTERED MAIL IS LOGGED IN BEFORE DELIVERY. THE CENTRAL
MAILROOM AND THE BID OPENING ROOM ARE ALMOST A MILE APART. UNDER THESE
CIRCUMSTANCES, IT IS THE OPINION OF THE CHIEF OF THE RECORDS AND MAIL
SERVICES BRANCH, THAT UNDER OPTIMUM DELIVERY CONDITIONS, THE BID WOULD
NOT HAVE REACHED THE BID OPENING ROOM UNTIL ABOUT 2:45 P.M., JUNE 11,
1965, THAT IS, 45 MINUTES AFTER THE TIME SET FOR BID OPENING.
THEREFORE, EVEN WITHOUT THE DELAY THAT APPARENTLY EXISTED IN THE MAILS,
THE FOUR SQUARE BID WOULD NOT HAVE ARRIVED IN TIME TO BE OPENED AT 2
P.M., JUNE 11, 1965.
ARMED SERVICES PROCUREMENT REGULATION 2-303.2 PROVIDES:
"CONSIDERATION FOR AWARD. A LATE BID SHALL BE CONSIDERED FOR AWARD
ONLY IF:
"/III) IF SUBMITTED BY MAIL (OR BY TELEGRAM WHERE AUTHORIZED), IT WAS
RECEIVED AT THE GOVERNMENT INSTALLATION IN SUFFICIENT TIME TO BE
RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION BY THE TIME SET FOR
OPENING, AND EXCEPT FOR DELAY DUE TO MISHANDLING ON THE PART OF THE
GOVERNMENT AT THE INSTALLATION, WOULD HAVE BEEN RECEIVED ON TIME AT THE
OFFICE DESIGNATED. * * "
IN THIS CASE THERE APPEARS TO HAVE BEEN AN UNACCOUNTED-FOR DELAY,
BOTH ON THE PART OF CIVILIAN AND MILITARY POSTAL OFFICIALS; HOWEVER,
EVEN IF THIS DELAY HAD BEEN ELIMINATED, UNDER THE BEST CONDITIONS
NORMALLY AVAILABLE, THE FOUR SQUARE BID WOULD HAVE ARRIVED APPROXIMATELY
45 MINUTES LATE, BECAUSE OF FOUR SQUARE'S FAILURE TO ALLOW FOR
SUFFICIENT TIME FOR TRANSMISSION.
IN YOUR LETTER YOU ALSO STATE THAT:
"IN ANY EVENT WE BELIEVE THAT A DEFINITE DECISION SHOULD BE CLEARLY
RENDERED AS TO WHICH OF THE POST OFFICES EITHER AT THE SENDING OR
RECEIVING END SHALL BE ACCEPTED AS BONA FIDE INFORMATION FOR
CONTRACTING OFFICER'S DECISION AND UNLESS THIS IS DEFINITELY
ESTABLISHED THERE COULD BE ENDLESS AMOUNT OF CONFUSION AND CONTRADICTION
ON THE PART OF LOCAL POST OFFICE OFFICIALS.'
WE FIND NO BASIS FOR SUCH A STATEMENT. BOTH THE POSTAL OFFICIALS AT
BRAZIL, INDIANA, AND DOVER, NEW JERSEY, AGREED THAT THE BID SHOULD
ARRIVE AT DOVER ON THE MORNING OF JUNE 11, 1965. SIMILARLY, THE POSTAL
AUTHORITIES AT DOVER AND THE PICATINNY ARSENAL AGREED THAT THE BID
SHOULD HAVE ARRIVED AT THE ARSENAL PRIOR TO 2 P.M., JUNE 11, 1965.
THERE IS NO CONTRADICTION OR INCONSISTENCY IN ANY OF THEIR STATEMENTS.
THE PERIOD OF TIME FOR HANDLING AT THE ARSENAL'S CENTRAL MAILROOM WAS A
FACT NOT KNOWN TO EITHER OF THE TWO POSTAL OFFICIALS. FURTHER, THE TIME
REQUIRED FOR DELIVERY TO THE BID OPENING ROOM DID NOT RESULT FROM
MISHANDLING ON THE PART OF THE GOVERNMENT BUT WAS DUE TO THE NORMAL
PROCEDURE WITH RESPECT TO HANDLING THE MAIL.
B-157812, DEC. 13, 1965
TO DRAKE AND PHILLIPS:
WE REFER TO YOUR LETTER OF OCTOBER 1, 1965, WITH ENCLOSURES, AND THE
LETTER FROM THE BENTON RIDGE TELEPHONE COMPANY, BENTON RIDGE, OHIO,
DATED NOVEMBER 5, 1965, IN CONNECTION WITH BENTON RIDGE'S PROTEST ON THE
FURNISHING OF A SWITCHING CENTER AT TOLEDO JUNCTION, OHIO.
YOUR LETTER OF OCTOBER 1, 1965, CONTENDS THAT ONLY BENTON RIDGE CAN
SUPPLY TELEPHONE SERVICE AT TOLEDO JUNCTION. IN SUPPORT OF THIS
POSITION YOU CITE THE ACT OF MARCH 30, 1949, CH. 41, 63 STAT. 17, AS
AMENDED BY THE ACT OF AUGUST 3, 1956, CH. 939, 70 STAT. 1012, 50 U.S.C.
491, WHICH PROVIDES IN PERTINENT PART AS FOLLOWS:
"* * * IN PROCURING SUCH SERVICES, (SEMI-AUTOMATIC GROUND ENVIRONMENT
SYSTEM) THE SECRETARY OF THE AIR FORCE SHALL UTILIZE TO THE FULLEST
EXTENT PRACTICABLE THE FACILITIES AND CAPABILITIES OF COMMUNICATION
COMMON CARRIERS, INCLUDING RURAL TELEPHONE COOPERATIVES, WITHIN THEIR
RESPECTIVE SERVICE AREAS AND FOR POWER SUPPLY, SHALL UTILIZE TO THE
FULLEST EXTENT PRACTICABLE, THE FACILITIES AND CAPABILITIES OF PUBLIC
UTILITIES AND RURAL ELECTRIC COOPERATIVES WITHIN THEIR RESPECTIVE
SERVICE AREAS. * * *"
YOU ADVISE THAT BENTON RIDGE HAS A CERTIFICATE FOR THE PERFORMANCE OF
TELEPHONE SERVICES IN THE TOLEDO JUNCTION AREA.
THE DEFENSE COMMUNICATIONS AGENCY IS PRESENTLY ENGAGED IN PROCUREMENT
OF TELEPHONE SWITCHING SERVICES FOR ITS CONTINENTAL UNITED STATES
AUTOMATIC VOICE NETWORK (CONUS-AUTOVON). THESE SWITCHING CENTERS WILL
BE INSTALLED, OWNED, AND OPERATED BY COMMON CARRIERS WHICH WILL PROVIDE
THE SERVICES TO THE GOVERNMENT. DCA'S BASIC POLICY WITH RESPECT TO
THESE PROCUREMENTS IS AS FOLLOWS:
"A. WHERE AN AUTOVON SWITCHING CENTER IS LOCATED IN THE SERVICE AREA
OF A TELEPHONE COMPANY, AND WHERE SERVICE IS PROVIDED TO DOD SUBSCRIBERS
IN THAT COMPANY'S SERVICE AREA, THE SWITCHING CENTER SERVICE WILL BE
PROVIDED BY THAT COMPANY ON A SOLE SOURCE BASIS.
"B. IF, HOWEVER, THE PROPOSED SWITCHING CENTER IS LOCATED IN THE
SERVICE AREA OF A TELEPHONE COMPANY WHERE THERE ARE NO KNOWN OR FORESEEN
DOD SUBSCRIBERS, AND TWO COMPANIES CLAIM THE RIGHT TO PROVIDE SERVICE, A
POSITIVE RULING BY THE APPROPRIATE PUBLIC SERVICE COMMISSION WILL BE
REQUESTED AND, IF GIVEN, WILL BE FOLLOWED. IN THE ABSENCE OF A
DEFINITIVE RULING BY THE COMMISSION THAT ONE CARRIER EXCLUSIVELY IS
AUTHORIZED TO PROVIDE THE SERVICE, COMPETITIVE PROCUREMENT WILL BE
LIED.'
WITH RESPECT TO THE SWITCHING CENTER AT TOLEDO JUNCTION, DCA ADVISES
THAT THE TRUNK ROUTES IN AND OUT OF THIS AREA MERELY TRANSMIT BENTON
RIDGE'S TERRITORY AND THAT THERE WILL BE NO BREAKOUT OF CIRCUITRY IN THE
BENTON RIDGE AREA. IT IS DCA'S POSITION THAT THERE WILL BE NO LOCAL
SERVICE TO THE 275 SUBSCRIBERS OF BENTON RIDGE AND THAT NONE IS
FORESEEN.
ON DECEMBER 15, 1964, DCA SUBMITTED THIS MATTER TO THE OHIO PUBLIC
UTILITIES COMMISSION FOR A RULING WHETHER IN THE CIRCUMSTANCES
PRESENTED, BENTON RIDGE WOULD HAVE THE EXCLUSIVE RIGHT TO FURNISH THE
SWITCHING CENTER AT TOLEDO JUNCTION. BY LETTER OF FEBRUARY 9, 1965, THE
OHIO PUBLIC UTILITIES COMMISSION ADVISED DCA THAT THE COMMISSION WAS NOT
AUTHORIZED TO MAKE A FORMAL DETERMINATION IN THE ABSENCE OF A FORMAL
APPLICATION BY AN INTERESTED PARTY. DCA WAS FURTHER ADVISED THAT NO
SUCH APPLICATION WAS PENDING.
ON SEPTEMBER 12, 1964, DCA BROUGHT A SITUATION WHICH IS SIMILAR TO
THE INSTANT MATTER TO THE ATTENTION OF THE FEDERAL COMMUNICATIONS
COMMISSION. BY LETTER OF SEPTEMBER 30, 1964, THE FEDERAL COMMUNICATIONS
COMMISSION ADVISED DCA AS FOLLOWS:
"* * * AND, WHILE THE FACT THAT THE SWITCHING CENTER IS TO BE LOCATED
IN THE LOCAL OPERATING TERRITORY OF A PARTICULAR TELEPHONE COMPANY WOULD
NOT BE A CONTROLLING FACTOR IN THE SELECTION OF THE COMPANY TO CONSTRUCT
AND OPERATE THE CENTER, THIS WOULD NOT PREVENT THE NORMAL APPLICATION OF
YOUR POLICY OF MAKING MAXIMUM USE OF ALL COMMON CARRIERS IN THE
DEVELOPMENT AND OPERATION OF THE SYSTEM.'
IN THE ABSENCE OF A FORMAL DEFINITIVE RULING BY A PUBLIC SERVICE
COMMISSION THAT BENTON RIDGE HAD THE EXCLUSIVE RIGHT TO FURNISH THE
PROPOSED SWITCHING CENTER AT TOLEDO JUNCTION AND SINCE THERE WOULD BE NO
LOCAL SERVICE, DCA DECIDED THAT BENTON RIDGE'S RIGHTS UNDER ITS
CERTIFICATE OF CONVENIENCE AND NECESSITY WOULD NOT BE VIOLATED BY
SOLICITING THE AMERICAN TELEPHONE AND TELEGRAPH COMPANY (AT AND T) TO
PROVIDE THE INSTANT SWITCHING CENTER. ALSO, DCA DETERMINED THAT 50
U.S.C. 491, QUOTED ABOVE, DID NOT SPECIFICALLY PRECLUDE DCA'S ACTION IN
THIS MATTER. CONSEQUENTLY, IN ACCORDANCE WITH ESTABLISHED POLICY, DCA
DECIDED THAT BOTH BENTON RIDGE AND AT AND T SHOULD BE SOLICITED FOR
PROVIDING THE PROPOSED SWITCHING CENTER.
PURSUANT TO OUR REVIEW OF 50 U.S.C. 491 WE FIND NOTHING THEREIN WHICH
WOULD SPECIFICALLY PRECLUDE DCA'S DETERMINATION TO UTILIZE COMPETITIVE
NEGOTIATION IN THE INSTANT PROCUREMENT. IN VIEW OF DCA'S ADVICE THAT
THERE WILL BE NO LOCAL SERVICE AT TOLEDO JUNCTION, AND IN THE ABSENCE OF
A SPECIFIC FORMAL RULING BY A PUBLIC UTILITIES COMMISSION THAT BENTON
RIDGE HAS THE EXCLUSIVE RIGHT TO FURNISH THE SWITCHING SERVICES AT
TOLEDO JUNCTION, WE HAVE NO BASIS FOR DETERMINING THAT DCA IS VIOLATING
BENTON RIDGE'S RIGHTS UNDER ITS CERTIFICATE OF CONVENIENCE AND
NECESSITY. IN THESE CIRCUMSTANCES WE FEEL THAT DCA'S ACTION IN THE
INSTANT PROCUREMENT WOULD BE IN ACCORDANCE WITH THE GENERAL POLICY
REGARDING NEGOTIATION SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION
SECTION 3-102 (C) WHICH PROVIDES THAT NEGOTIATED PROCUREMENTS SHALL BE
ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT.
BY LETTER OF NOVEMBER 5, 1965, BENTON RIDGE RAISED THE QUESTION
WHETHER WESTERN ELECTRIC COMPANY'S PROPOSAL FOR THE SUPPLYING OF
ELECTRONIC SWITCHING SYSTEM NO. 1 EQUIPMENT WAS RESPONSIVE TO THE
REQUEST FOR PROPOSALS. SPECIFICALLY, BENTON RIDGE ADVISED THAT WESTERN
ELECTRIC WOULD NOT MEET THE "NON-BLOCKING" REQUIREMENTS OF PARAGRAPH
2.1.4 AND PARAGRAPH 2.3.7 OF APPENDIX A OF THE SPECIFICATIONS. DCA HAS
ADVISED THAT PARAGRAPH 2.3.7 OF APPENDIX A OF THE SPECIFICATIONS STATES
AS FOLLOWS:
"* * * "THE NON-BLOCKING REQUIREMENT MAY BE SATISFIED BY PROVIDING A
NON-BLOCKING SWITCHING MATRIX, OR BY OTHER ALTERNATE METHODS ACCEPTABLE
TO THE GOVERNMENT WHICH ESSENTIALLY MEET THE LEVEL OF PERFORMANCE
ASSOCIATED WITH A NON-BLOCKING MATRIX.' * * *"
WITH RESPECT TO EVALUATION OF PROPOSALS FOR SWITCHING MACHINES, DCA
USES THE FOLLOWING PROCEDURE:
"THE DEGREE TO WHICH A SWITCHING MACHINE MEETS REQUIREMENTS OF DCA
SPECIFICATIONS IS DETERMINED BY THE TECHNICAL EVALUATION PANEL AND FORMS
BASIS FOR RECOMMENDATIONS TO CONTRACTING OFFICER. CONCURRENTLY THE COST
EVALUATION PANEL SUBMITS RECOMMENDATIONS TO CONTRACTING OFFICER, WHO
THEREUPON RECOMMENDS THE PROPOSAL OFFERING THE GREATEST ADVANTAGE TO
GOVERNMENT TO A REVIEW BOARD AT HEADQUARTERS, DCA. THE REVIEW BOARD
STUDIES THE COST AND TECHNICAL EVALUATION TOGETHER WITH RECOMMENDATIONS
OF CONTRACTING OFFICER AND SUBMITS ITS FINDINGS TO THE DIRECTOR, DCA WHO
MAKES THE FINAL DECISION. * * *"
DCA HAS DETERMINED THAT NONE OF THE PROPOSED SWITCHING MACHINES HAVE
FULLY MET ALL OF THE DETAILED REQUIREMENTS OF THE SPECIFICATIONS. WITH
RESPECT TO THE ELECTRONIC SWITCHING SYSTEM NO. 1 PROPOSED BY WESTERN
ELECTRIC, DCA HAS DETERMINED THAT THESE CAN BE MADE ESSENTIALLY
,NON-BLOCKING" (WITH A PROBABILITY OF 1: 100,000) IN 1968 BY AN
EXTENDED PATH HUNTING TECHNIQUE" IN LIEU OF A NON-BLOCKING MATRIX. DCA
HAS DECIDED NOT TO DISQUALIFY ANY OF THE PROPOSALS TO PROVIDE AUTOVON
SERVICE AT TOLEDO JUNCTION UNTIL THE EVALUATION PURSUANT TO THE
PROCEDURE, QUOTED ABOVE, HAS BEEN COMPLETED, REVIEWED AND APPROVED.
IN NEGOTIATED PROCUREMENTS, THE RULES OF FORMALLY ADVERTISED
COMPETITIVE BIDDING, SUCH AS THE REQUIREMENT FOR AWARD TO THE LOWEST
RESPONSIVE, RESPONSIBLE BIDDER, ARE NOT APPLICABLE AND THE NEGOTIATION
AUTHORITY MAY LEGALLY TAKE INTO CONSIDERATION ALL FACTORS DEEMED
ESSENTIAL TO THE ACCOMPLISHMENT OF THE PROCUREMENT. SEE B-154995,
OCTOBER 19, 1964, TO MAXWELL ELECTRONICS CORPORATION. WE FEEL THE
FOLLOWING STATEMENTS FROM OUR DECISION B-143389, AUGUST 26, 1960, WOULD
BE APPLICABLE TO THE INSTANT MATTER:
"THE QUESTION AS TO THE ACTION, IF ANY, WHICH OUR OFFICE SHOULD TAKE
IN CASES INVOLVING THE EVALUATION OF TECHNICAL REQUIREMENTS OF
SPECIFICATIONS, ETC., HAS BEEN THE SUBJECT OF A NUMBER OF DECISIONS BY
OUR OFFICE. YOUR PROTEST IS BASED UPON SUCH AN EVALUATION. OF
NECESSITY, OUR OFFICE HAS ESTABLISHED A RULE GOVERNING SUCH SITUATIONS.
IN A DECISION DATED JANUARY 8, 1938, TO THE PRESIDENT, BOARD OF
COMMISSIONERS, DISTRICT OF COLUMBIA, PUBLISHED AT 17 COMP. GEN. 554,
557, WE SET FORTH THE FOLLOWING RULE WHICH WE CONSIDER TO BE CONTROLLING
IN THE INSTANT MATTER:
" "IT IS IN THE PROVINCE OF ADMINISTRATIVE OFFICERS TO DRAFT PROPER
SPECIFICATIONS NECESSARY TO SUBMIT FOR FAIR COMPETITIVE BIDDING PROPOSED
CONTRACTS TO SUPPLY GOVERNMENTAL NEEDS, AND TO DETERMINE FACTUALLY
WHETHER ARTICLES OFFERED MEET THOSE SPECIFICATIONS. * * *" "
IN VIEW OF THE RECORD PRESENTED AND OUR HOLDINGS, CITED ABOVE, AND
THE PROVISION IN THE SPECIFICATIONS THAT ALTERNATE METHODS WOULD BE
ACCEPTABLE WE FIND THAT BENTON RIDGE'S CONTENTIONS IN THE LETTER OF
NOVEMBER 5, 1965, WOULD NOT BE A BASIS FOR OUR OFFICE TO QUESTION THE
EVALUATION OF THE PROPOSALS SUBMITTED FOR THE INSTANT PROCUREMENT.
B-157847, DEC. 13, 1965
TO EUGENE M. SANCHEZ:
REFERENCE IS MADE TO YOUR CLAIM DATED JUNE 30, 1965, FOR
REIMBURSEMENT FOR DEPENDENTS' TRAVEL FROM AUSTRALIA TO THE UNITED STATES
DURING APRIL AND MAY 1955, INCIDENT TO ORDERS DATED FEBRUARY 4, 1955,
WHILE SERVING AS CAPTAIN, UNITED STATES ARMY, WHICH WAS TRANSMITTED TO
OUR CLAIMS DIVISION FOR SETTLEMENT BY THE FINANCE CENTER, U.S. ARMY,
INDIANAPOLIS, INDIANA. ALSO, WE ARE IN RECEIPT OF YOUR LETTER OF
OCTOBER 18, 1965, RELATIVE TO THE ABOVE CLAIM, IN WHICH YOU EXPRESS SOME
CONCERN AS TO THE STATEMENT BY OUR CLAIMS DIVISION REGARDING
RECONSIDERATION OF THE ACTION TAKEN ON YOUR CLAIM, EXPLAINING THAT YOU
HAVE NO QUESTIONS REGARDING THE CLAIM YOU SUBMITTED EARLIER THIS YEAR
WHICH WAS DULY SETTLED IN JUNE 1965. PLEASE BE ADVISED THAT OUR
ACKNOWLEDGMENT LETTER OF OCTOBER 13, 1965, TO YOU, HAD REFERENCE TO YOUR
PRESENT CLAIM OF JUNE 30, 1965. SINCE A SIMILAR CLAIM WAS DISALLOWED BY
SETTLEMENT BY OUR CLAIMS DIVISION ON JULY 2, 1956, WE WILL CONSIDER YOUR
PRESENT CLAIM IN THE NATURE OF A REQUEST FOR RECONSIDERATION OF THAT
SETTLEMENT.
IN ORDER NOT TO CONFUSE YOUR PRESENT CLAIM WITH YOUR CLAIM WHICH WAS
RECENTLY ALLOWED IN THE AMOUNT OF $348 BY OUR OFFICE BY SETTLEMENT DATED
MAY 27, 1965, THE LATTER CLAIM REPRESENTED REIMBURSEMENT FOR THE COST OF
TRANSPORTATION OF DEPENDENTS (WIFE AND CHILDREN) FROM CANBERRA,
AUSTRALIA, TO MUNICH, GERMANY, DURING JULY AND SEPTEMBER 1964, AT NOT TO
EXCEED THE COST BY MILITARY AIR TRANSPORT SERVICE FROM MCGUIRE AIR FORCE
BASE, NEW JERSEY, TO FRANKFURT, GERMANY. THAT CLAIM WAS BASED ON YOUR
ORDERS OF JUNE 17 AND AUGUST 3, 1964, INCIDENT TO YOUR REENLISTMENT IN
THE REGULAR ARMY AT THE U.S. RECRUITING STATION, NEW YORK, THE RECORD
SHOWING THAT YOUR DEPENDENTS AT THAT TIME WERE ON A VISIT AT CANBERRA,
AUSTRALIA.
BY LETTER ORDERS 2-1, HEADQUARTERS 8TH TRANSPORTATION GROUP (MOVEMENT
CONTROL) RHEINAU TRANSPORTATION CENTER, APO 403, U.S. ARMY DATED
FEBRUARY 4, 1955, YOU WERE RELIEVED FROM ASSIGNMENT WITH COMPANY "A" OF
THAT ORGANIZATION, WITH DUTY STATION AT FRANKFURT, GERMANY, AND WERE
ASSIGNED TO FORT ORD, CALIFORNIA. YOU WERE DIRECTED TO PROCEED TO
MUNICH, GERMANY, FOR FURTHER MOVEMENT TO LEGHORN, ITALY, ON MARCH 19,
1955, TO RETURN TO THE CONTINENTAL UNITED STATES VIA THE U.S.S.
CONSTITUTION. NO PROVISION WAS MADE FOR DEPENDENTS' TRAVEL IN THE
ORDERS. HOWEVER, YOU WERE ADMINISTRATIVELY PAID FOR THEIR TRAVEL FROM
SAN PEDRO, CALIFORNIA, TO FORT ORD, CALIFORNIA.
IN THE FIRST CLAIM SUBMITTED BY YOU, YOU STATE THAT YOU WERE
STATIONED IN FRANKFURT, GERMANY, FROM APRIL 1952 UNTIL FEBRUARY 1955,
AND YOUR DEPENDENTS JOINED YOU IN FRANKFURT IN JULY 1952, AND REMAINED
THERE UNTIL NOVEMBER 1954, AT WHICH TIME THEY TRAVELED AT YOUR EXPENSE
TO AUSTRALIA TO VISIT YOUR WIFE'S FAMILY. YOU STATED FURTHER THAT YOUR
DEPENDENTS DEPARTED AUSTRALIA APRIL 12, 1955, TRAVELING BY COMMERCIAL
VESSEL AT YOUR EXPENSE AND ARRIVED AT SAN PEDRO, CALIFORNIA, MAY 5,
1955. YOU THEREFORE CLAIMED REIMBURSEMENT FOR THEIR TRAVEL BY VESSEL ON
THE BASIS OF THE LAND TRAVEL YOUR DEPENDENTS WOULD HAVE HAD TO PERFORM
FROM NEW YORK CITY TO FORT ORD, CALIFORNIA, IF THEY HAD RETURNED TO THE
UNITED STATES WITH YOU, LESS THE AMOUNT PAID FOR THEIR TRAVEL FROM SAN
PEDRO TO FORT ORD, CALIFORNIA.
YOUR CLAIM WAS DISALLOWED BY SETTLEMENT DATED JULY 2, 1956,
SUBSTANTIALLY FOR THE REASON THAT REIMBURSEMENT FOR TRANSPORTATION OF
DEPENDENTS IS NOT AUTHORIZED WHEN TRAVEL IS PERFORMED BY DEPENDENTS
PRIOR TO THE DATE OF ISSUANCE OF ORDERS AND IN VIEW OF THE FACT THAT
YOUR DEPENDENTS DID NOT ACTUALLY PERFORM TRAVEL FROM NEW YORK TO FORT
ORD. IN YOUR PRESENT CLAIM DATED JUNE 30, 1965, YOU AGAIN STATE THAT
YOUR DEPENDENTS DEPARTED SYDNEY, AUSTRALIA, INDICATING THEY TRAVELED
ABOARD THE M/S PARRAKOOLA, A FOREIGN REGISTRY VESSEL, APRIL 12, 1955,
ARRIVING AT SAN PEDRO, CALIFORNIA, MAY 5, 1955. YOU STATED FURTHER THAT
SINCE YOUR CLAIM FOR LAND TRAVEL ACROSS THE UNITED STATES TO FORT ORD
WAS NOT ALLOWED, YOU REQUEST REIMBURSEMENT FOR THE COST OF DEPENDENTS'
WATER TRAVEL FROM AUSTRALIA TO THE UNITED STATES.
UNDER THE PROVISIONS OF PARAGRAPH M7058 OF THE JOINT TRAVEL
REGULATIONS, IN EFFECT AT THE TIME YOUR DEPENDENTS PERFORMED THEIR
TRAVEL FROM AUSTRALIA, TRANSPORTATION OF DEPENDENTS AT GOVERNMENT
EXPENSE WAS AUTHORIZED FOR TRAVEL PERFORMED FROM OTHER THAN THE OLD
PERMANENT STATION TO THE NEW STATION, NOT TO EXCEED THE ENTITLEMENT FROM
THE OLD TO THE NEW STATION. WE BELIEVE SUCH PROVISIONS ARE FOR
APPLICATION IN YOUR CASE AND IT HAS BEEN INFORMALLY ASCERTAINED THAT
TRANSPORTATION BY A GOVERNMENT VESSEL OR A VESSEL OF UNITED STATES
REGISTRY WAS NOT AVAILABLE FOR TRAVEL FROM AUSTRALIA TO THE UNITED
STATES DURING THAT PERIOD. UNDER SUCH REGULATIONS, HOWEVER, THE AMOUNT
DUE AS REIMBURSEMENT FOR THE TRAVEL OF YOUR DEPENDENTS MAY NOT EXCEED
THE COST OF CONSTRUCTIVE TRAVEL FROM THE OLD TO THE NEW STATION. WITH
RESPECT TO THE COST OF CONSTRUCTIVE TRAVEL, WE HAVE HELD IN 40 COMP.
GEN. 482, IN SUBSTANCE, THAT WHEN A MEMBER'S DEPENDENTS ARE AUTHORIZED
AS DISTINGUISHED FROM SPECIFICALLY DIRECTED, TO PERFORM TRANSOCEANIC
TRAVEL BY GOVERNMENT CONVEYANCE BUT USE COMMERCIAL TRANSPORTATION AT THE
MEMBER'S PERSONAL EXPENSE, THE MEMBER MAY BE REIMBURSED ON THE BASIS OF
THE MILITARY SEA TRANSPORTATION SERVICE CHARGE THAT WOULD HAVE BEEN
SUSTAINED BY THE SERVICE CONCERNED, HAD HIS DEPENDENTS TRAVELED BY
AVAILABLE GOVERNMENT TRANSPORTATION. SINCE YOUR DEPENDENTS WERE NOT
DIRECTED TO USE A GOVERNMENT VESSEL FOR THEIR TRAVEL TO THE UNITED
STATES, SUCH CHARGE IS TO BE USED IN THE DETERMINATION OF THE COST OF
CONSTRUCTIVE TRAVEL.
ACCORDINGLY, WE ARE INSTRUCTING OUR CLAIMS DIVISION TO DETERMINE WHAT
WOULD HAVE BEEN THE COST TO THE GOVERNMENT AT THE TIME YOUR DEPENDENTS
PERFORMED TRAVEL FROM AUSTRALIA TO THE UNITED STATES, HAD THEY PERFORMED
SUCH TRAVEL BY MILITARY SEA TRANSPORTATION SERVICE FROM THE NEAREST PORT
OF EMBARKATION TO YOUR OLD DUTY STATION, FRANKFURT, GERMANY, TO NEW
YORK, PLUS MONETARY ALLOWANCE IN LIEU OF TRANSPORTATION FOR THE DISTANCE
FROM NEW YORK TO FORT ORD, CALIFORNIA. IF THE TOTAL COST IS LESS THAN
THE ACTUAL OF YOUR DEPENDENTS' TRAVEL FROM AUSTRALIA TO FORT ORD, VIA
SAN PEDRO, CALIFORNIA, SETTLEMENT WILL ISSUE IN THAT AMOUNT, LESS THE
AMOUNT PREVIOUSLY PAID FOR THEIR TRAVEL FROM SAN PEDRO TO FORT ORD. IN
THE EVENT THE COST OF THE CONSTRUCTIVE TRAVEL IS GREATER THAN THE ACTUAL
COST OF THIS TRAVEL, SETTLEMENT WILL ISSUE FOR THE DOLLAR EQUIVALENT OF
THE AMOUNT PAID FOR THE TRAVEL OF YOUR DEPENDENTS BY COMMERCIAL VESSEL
FROM AUSTRALIA TO SAN PEDRO, CALIFORNIA.
B-157848, DEC. 13, 1965
TO STAFF SERGEANT WILLIAM E. LEE, USAF:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 29, 1965, IN EFFECT
REQUESTING A REVIEW OF SETTLEMENT DATED SEPTEMBER 10, 1965, WHICH
DISALLOWED YOUR CLAIM FOR MILEAGE FOR TRAVEL PERFORMED IN THE UNITED
STATES INCIDENT TO YOUR TRANSFER FROM SAIGON, VIETNAM, TO WIESBADEN,
GERMANY, UNDER ORDERS OF JANUARY 16, 1964, AS AMENDED.
BY PARAGRAPH 1, SPECIAL ORDERS NO. 13, HEADQUARTERS, MILITARY
ASSISTANCE ADVISORY GROUP, VIETNAM, DATED JANUARY 16, 1964, YOU WERE
RELIEVED FROM ASSIGNMENT AT THAT STATION FOR TRANSFER ON PERMANENT
CHANGE OF STATION TO HEADQUARTERS, UNITED STATES AIR FORCES IN EUROPE,
APO 633, NEW YORK. YOU WERE DIRECTED TO REPORT NOT LATER THAN 3 WORKING
DAYS PRIOR TO DEPARTURE AT THE PERSONNEL OFFICE FOR INFORMATION RELATIVE
TO AIR MOVEMENT DATA AND REPORTING DATA TO MCGUIRE AIR FORCE BASE, NEW
JERSEY. YOUR LEAVE ADDRESS WAS SHOWN TO BE IN PHILADELPHIA,
PENNSYLVANIA. CONCURRENT TRANSPORTATION OF DEPENDENTS WAS AUTHORIZED.
TRAVEL BY MILITARY AIRCRAFT AND BY PRIVATELY OWNED AUTOMOBILE (TPA) WAS
AUTHORIZED. AUTHORITY WAS STATED TO BE UNITED STATES AIR FORCE MILITARY
PERSONNEL CENTER ASSIGNMENT CARD, DATED DECEMBER 4, 1963. BY PARAGRAPH
17, SPECIAL ORDERS NO. 69, BY THE SAME AUTHORITY, DATED MARCH 23, 1964,
THE ORDERS OF JANUARY 16, 1964, WERE AMENDED TO SHOW EFFECTIVE DATE OF
STRENGTH ACCOUNTABILITY AS MAY 25, 1964, AND THAT YOU AND YOUR
DEPENDENTS WERE TO REPORT AT MCGUIRE AIR FORCE BASE NO LATER THAN MAY
20, 1964, FOR DEPARTURE THAT DAY TO FRANKFURT, GERMANY. THE ORDERS ALSO
STATED THAT THE NORMAL ROUTE WAS FROM SAIGON TO FRANKFURT VIA BANGKOK
AND NEW DELHI, WHEREAS THE APPROVED CIRCUITOUS ROUTE WAS VIA TRAVIS AIR
FORCE BASE, CALIFORNIA. TRANSPORTATION AT GOVERNMENT EXPENSE WAS
AUTHORIZED FROM MCGUIRE AIR FORCE BASE TO FRANKFURT, GERMANY. THE
ORDERS INDICATED FURTHER THAT YOU WERE TO BE IN A LEAVE STATUS BETWEEN
APRIL 20 AND MAY 20, 1964, AND THAT ALL EXPENSES INCURRED WHILE IN A
LEAVE STATUS WERE TO BE PAID BY YOU. SPACE-AVAILABLE TRANSPORTATION VIA
MATS AND MSTS FACILITIES WAS AUTHORIZED, WHEN AVAILABLE, BETWEEN SAIGON
AND MCGUIRE AIR FORCE BASE. THE AUTHORITY FOR CIRCUITOUS TRAVEL WAS
STATED TO BE AN AIR FORCE LETTER DATED MARCH 31, 1960, SUBJECT: "LEAVE
ENROUTE TO CONSECUTIVE OVERSEAS TOUR.' AUTHORITY FOR TRAVEL BY PRIVATELY
OWNED AUTOMOBILE, AS PROVIDED IN THE ORDERS OF JANUARY 16, 1964, WAS
EXPRESSLY CONTINUED BY THE ORDERS OF MARCH 23, 1964.
YOUR ITINERARY SHOWS THAT YOU DEPARTED SAIGON, VIETNAM, BY GOVERNMENT
AIR, APRIL 18, 1964, AND PROCEEDED VIA THE PHILIPPINES, GUAM, AND
HAWAII, ARRIVING AT TRAVIS AIR FORCE BASE, CALIFORNIA, ON APRIL 19,
1964. YOU THEN TRAVELED BY COMMERCIAL AIR TO PHILADELPHIA,
PENNSYLVANIA, ARRIVING THE SAME DAY, AND REMAINED THERE IN A LEAVE
STATUS UNTIL MAY 20, 1964, AT WHICH TIME YOU REPORTED AT MCGUIRE AIR
FORCE BASE, NEW JERSEY, FOR TRAVEL BY GOVERNMENT AIR TO RHEIN-MAIN AIR
BASE, GERMANY, ARRIVING AT YOUR DUTY STATION, WIESBADEN, GERMANY, ON MAY
21, 1964. THE RECORD SHOWS THAT YOU WERE PAID $183.86 FOR YOUR TRAVEL
BY VOUCHER DATED MAY 27, 1964, WHICH ALLOWED YOU $9.92 PER DIEM FOR THE
TRAVEL ACTUALLY PERFORMED TO TRAVIS AIR FORCE BASE AND $173.94 AS
MILEAGE FOR THE DISTANCE FROM TRAVIS AIR FORCE BASE TO MCGUIRE AIR FORCE
BASE, NEW JERSEY. ON JUNE 8, 1964, AN ADJUSTMENT VOUCHER ALLOWED YOU
$20.62 AS PER DIEM FOR THE CONSTRUCTIVE TRAVEL TIME BY GOVERNMENT AIR
FROM SAIGON TO FRANKFURT, GERMANY, VIA BANGKOK, THAILAND, AND YOU WERE
REQUIRED TO REFUND $163.24, THE BALANCE OF THE $183.86, PREVIOUSLY PAID
TO YOU.
BY LETTER DATED APRIL 13, 1965, TO THE AIR FORCE ACCOUNTING AND
FINANCE CENTER YOU REQUESTED CLARIFICATION AS TO WHY THE AUTHORIZATION
IN YOUR ORIGINAL ORDERS FOR RETURN TRAVEL THROUGH THE UNITED STATES
PRIOR TO REPORTING TO YOUR CONSECUTIVE OVERSEAS ASSIGNMENT IN EUROPE
FROM VIETNAM WAS LATER DELETED. YOU STATED THAT YOU KNEW OF THREE OTHER
CASES WHERE PERSONNEL RECEIVING SIMILAR ORDERS WERE PAID FOR TRAVEL
THROUGH THE UNITED STATES, AND THAT YOU HAD TO TRAVEL FROM VIETNAM ON A
SPACE-AVAILABLE BASIS IN A LEAVE STATUS AND PAY FOR YOUR TRAVEL FROM
TRAVIS AIR FORCE BASE TO PHILADELPHIA. YOU WERE SUBSEQUENTLY REQUESTED
TO SUBMIT A CLAIM FOR SUCH TRAVEL, WHICH CLAIM WAS LATER TRANSMITTED TO
OUR OFFICE FOR SETTLEMENT. BY SETTLEMENT DATED SEPTEMBER 10, 1965, YOUR
CLAIM WAS DISALLOWED FOR THE REASONS STATED.
IN YOUR LETTER DATED SEPTEMBER 29, 1965, YOU AGAIN ASK WHETHER THE
AUTHORITY CITED IN THE AIR FORCE LETTER OF MARCH 31, 1960, REFERRED TO
IN YOUR ORDERS WAS APPLICABLE DURING THE PERIOD YOU PERFORMED THE
TRAVEL, AND IF SO, WHY SUCH AUTHORITY DID NOT APPLY IN PRIOR INSTANCES
TO OTHER PERSONNEL WHO RECEIVED CONSECUTIVE OVERSEAS ASSIGNMENTS. ALSO
YOU REFER TO AN ARTICLE MENTIONED IN YOUR PREVIOUS LETTER, WHICH YOU SAY
APPEARED IN THE EUROPEAN STARS AND STRIPES NEWSPAPER, APRIL 10, 1965,
INDICATING THAT THE AIR FORCE WAS AUTHORIZING RETURN TRAVEL THROUGH THE
UNITED STATES TO THOSE MEMBERS REQUESTING A CONSECUTIVE OVERSEAS TOUR
AFTER VIETNAM DUTY.
WE DO NOT HAVE A COPY OF THE AIR FORCE LETTER DATED MARCH 31, 1960,
REFERRED TO IN THE ORDERS DATED MARCH 23, 1964, NOR DO WE HAVE A COPY OF
THE EUROPEAN STARS AND STRIPES NEWSPAPER DATED APRIL 10, 1965. HOWEVER,
PARAGRAPH 3308, AIR FORCE MANUAL 75-4, WHICH WAS IN EFFECT DURING THE
PERIOD INVOLVED, SETS OUT THE POLICY OF THE AIR FORCE REGARDING
CIRCUITOUS TRAVEL. WHILE STATED IN TERMS OF STATION CHANGES FROM
OVERSEAS TO THE UNITED STATES, ITS APPLICATION TO CASES SUCH AS YOURS
INVOLVING CIRCUITOUS TRAVEL THROUGH THE UNITED STATES APPEARS TO HAVE
BEEN INTENDED. SUBPARAGRAPH B (1) OF THAT PARAGRAPH PROVIDES THAT
PERSONNEL RETURNING TO THE UNITED STATES MAY BE PROVIDED TRANSPORTATION
VIA A CIRCUITOUS ROUTE, PROVIDED THE TOTAL COSTS OVER SUCH ROUTING DOES
NOT EXCEED THE CHARGES THE AIR FORCE WOULD HAVE BEEN REQUIRED TO PAY IF
THE TRAVEL HAD BEEN PERFORMED VIA THE NORMAL ROUTING. SUBPARAGRAPH B
(3) PROVIDES IN PERTINENT PART THAT APPROVED ORDERS FOR CIRCUITOUS
TRAVEL WILL INDICATE (A) THE NORMAL ROUTE, (B) THE APPROVED CIRCUITOUS
ROUTE AND MODE OF TRAVEL, (C) THE POINTS BETWEEN WHICH TRANSPORTATION IS
AUTHORIZED AT GOVERNMENT EXPENSE, (D) THE CONSTRUCTIVE TRAVEL TIME BY
THE NORMAL DIRECT ROUTE, (E) THAT THE MEMBER IS IN A LEAVE STATUS
BETWEEN RELIEF FROM THE OLD DUTY STATION AND DATE OF DEPARTURE AT THE
PORT AT WHICH GOVERNMENT EXPENSE TRANSPORTATION IS FURNISHED, AND THAT
ALL TRAVEL AND RELATED EXPENSES INCURRED WHILE IN A LEAVE STATUS WILL BE
PAID BY THE MEMBER, (F) THAT SPACE-AVAILABLE TRANSPORTATION VIA MATS AND
MSTS FACILITIES IS AUTHORIZED, WHEN AVAILABLE, BETWEEN OLD DUTY STATION
AND POINT AT WHICH GOVERNMENT EXPENSE TRANSPORTATION IS FURNISHED, AND
(G) THAT NO EXCESS BAGGAGE IS AUTHORIZED WHILE TRAVELING IN A
SPACE-AVAILABLE STATUS.
UNDER REGULATIONS ISSUED PURSUANT TO PERTINENT STATUTORY AUTHORITY,
37 U.S.C. 404, THE GOVERNMENT'S OBLIGATION TO MEMBERS OF THE UNIFORMED
SERVICES UPON PERMANENT CHANGE OF STATION IS LIMITED TO FURNISHING THEM
TRANSPORTATION OR REIMBURSEMENT THEREFOR AS TRAVEL ALLOWANCE OR MILEAGE,
FROM THEIR OLD TO THEIR NEW DUTY STATION. A MEMBER WHO PERFORMS
AUTHORIZED TRAVEL BY A ROUTE OTHER THAN THE DIRECT OR OFFICIAL ROUTE IS
DUE REIMBURSEMENT FOR THE TRAVEL AND TRANSPORTATION COSTS ACTUALLY
INCURRED, NOT TO EXCEED THE COSTS FOR TRAVEL BY THE DIRECT OR OFFICIAL
ROUTE TO HIS NEW DUTY STATION. SEE 7 COMP. GEN. 840; 9 ID. 210;
B-110057, SEPTEMBER 9, 1952; B-142270, OCTOBER 19, 1960, AND B-155778,
FEBRUARY 15, 1965. IN OUR OPINION, THE FACT THAT TRAVEL WAS PERFORMED
INCIDENT TO A TRANSFER FROM ONE OVERSEA DUTY STATION TO ANOTHER OVERSEA
DUTY STATION SHOULD NOT AFFECT THE GOVERNMENT'S OBLIGATION AS STATED
ABOVE.
IT HAS BEEN INFORMALLY ASCERTAINED FROM THE DEPARTMENT OF THE AIR
FORCE THAT THE COST TO THE GOVERNMENT FOR YOUR TRAVEL BY MILITARY AIR
TRANSPORT SERVICE FROM SAIGON TO THE WEST COAST OF THE UNITED STATES
(TRAVIS AIR FORCE BASE, CALIFORNIA) PLUS THE COST FOR TRAVEL BY
GOVERNMENT AIR FROM THE EAST COAST (MCGUIRE AIR FORCE BASE, NEW JERSEY)
TO FRANKFURT, GERMANY, IS GREATER THAN WOULD HAVE BEEN THE COST FOR
TRAVEL BY GOVERNMENT AIR BY THE DIRECT ROUTE FROM SAIGON TO FRANKFURT,
VIA NEW DELHI, INDIA. HENCE, THERE WAS NO FURTHER OBLIGATION FOR THE
GOVERNMENT TO FURNISH TRANSPORTATION IN THE UNITED STATES OR TO PAY
MILEAGE FOR SUCH TRAVEL. REGARDING YOUR STATEMENT THAT OTHER MEMBERS
RECEIVING CONSECUTIVE OVERSEAS ASSIGNMENTS TO EUROPE WERE AUTHORIZED TO
TRAVEL THROUGH CONTINENTAL UNITED STATES AND WERE PAID FOR SUCH TRAVEL,
IF THE FACTS INVOLVED IN THOSE CASES ARE NOT DISTINGUISHABLE FROM THOSE
PRESENTED IN YOUR CLAIM, IT WOULD APPEAR THAT PAYMENTS TO THEM WERE
ERRONEOUS AND SUCH PAYMENTS WOULD FURNISH NO BASIS FOR FAVORABLE ACTION
ON YOUR CLAIM. SEE 34 COMP. GEN. 597-598.
ACCORDINGLY, THERE IS NO AUTHORITY FOR THE PAYMENT OF YOUR CLAIM AND
THE DISALLOWANCE OF
B-158004, DEC. 13, 1965
TO PRIVATE MICHAEL J. GILLIS, US 56:
REFERENCE IS MADE TO YOUR CLAIM DATED OCTOBER 22, 1965, TRANSMITTED
HERE BY LIEUTENANT COLONEL HOWARD F. VIRE, INSPECTOR GENERAL,
HEADQUARTERS, WILLIAM BEAUMONT GENERAL HOSPITAL, EL PASO, TEXAS, WITH
THE REQUEST THAT IT BE CONSIDERED AS A RESUBMISSION OF YOUR CLAIM FOR
ADDITIONAL MILEAGE ALLOWANCE FOR TRAVEL PERFORMED FROM FORT ORD,
CALIFORNIA, TO BEAUMONT, TEXAS, AND THENCE TO WILLIAM BEAUMONT GENERAL
HOSPITAL, EL PASO, TEXAS, WHICH CLAIM WAS DISALLOWED BY OUR CLAIMS
DIVISION ON OCTOBER 12, 1965.
BY PARAGRAPH 234, SPECIAL ORDERS NO. 157, HEADQUARTERS, UNITED STATES
ARMY TRAINING CENTER, INFANTRY AND FORT ORD, CALIFORNIA, DATED JUNE 29,
1965, YOU WERE REASSIGNED ON PERMANENT CHANGE OF STATION FROM FORT ORD
TO THE WILLIAM BEAUMONT GENERAL HOSPITAL (3414), TEXAS. YOU WERE
DIRECTED TO PROCEED JULY 10, 1965. THE RECORD SHOWS THAT YOU WERE PAID
ADVANCE TRAVEL ALLOWANCE IN THE AMOUNT OF $127.86, FOR THE DISTANCE FROM
FORT ORD TO BEAUMONT, TEXAS. IN YOUR CLAIM YOU STATED THAT UPON ARRIVAL
AT BEAUMONT, TEXAS, JULY 23, 1965, YOU WERE ADVISED BY PERSONNEL OF THE
ARMY RECRUITING STATION THERE THAT THE WILLIAM BEAUMONT GENERAL HOSPITAL
WAS LOCATED IN EL PASO, TEXAS, AND YOU WERE REQUIRED TO PERFORM FURTHER
TRAVEL TO YOUR DUTY STATION IN EL PASO. YOU WERE SUBSEQUENTLY PAID
$73.56 AS MILEAGE FOR THE DIRECT DISTANCE FROM FOR ORD, CALIFORNIA, TO
EL PASO, TEXAS, WHICH AMOUNT WAS OFFSET AGAINST THE TRAVEL ALLOWANCE
($127.86) ADVANCED TO YOU, LEAVING AN INDEBTEDNESS OF $54.30. ON YOUR
TRAVEL VOUCHER YOU SHOW THAT YOU TRAVELED BY PRIVATELY OWNED VEHICLE
FROM FORT ORD TO BEAUMONT, TEXAS, AND FROM THAT PLACE TO EL PASO BY
COMMERCIAL AIR.
IN YOUR CLAIM DATED JULY 26, 1965, YOU STATED THAT BECAUSE YOUR
ORDERS INDICATED YOUR ASSIGNMENT WAS TO THE WILLIAM BEAUMONT GENERAL
HOSPITAL, TEXAS, AND YOU WERE GIVEN A TRAVEL ADVANCE FROM FORT ORD TO
BEAUMONT, TEXAS, YOU BELIEVED THAT BEAUMONT, TEXAS, WAS YOUR CORRECT NEW
DUTY STATION. YOU STATED FURTHER THAT YOU HAD NO KNOWLEDGE OF THE FACT
THAT THE HOSPITAL WAS LOCATED IN EL PASO, TEXAS, AND IT WAS ONLY UPON
ARRIVAL AT BEAUMONT THAT YOU WERE ADVISED AS TO THE CORRECT PLACE OF
ASSIGNMENT. YOU THEREFORE CLAIMED MILEAGE FOR THE DISTANCE FROM FORT
ORD, CALIFORNIA, TO BEAUMONT, TEXAS, AND THENCE TO EL PASO, TEXAS, LESS
THE AMOUNT PREVIOUSLY PAID FOR THE DIRECT DISTANCE FROM FORT ORD TO EL
PASO, TEXAS.
BY SETTLEMENT DATED OCTOBER 12, 1965, YOUR CLAIM WAS DISALLOWED FOR
THE REASONS STATED THEREIN.
IN YOUR RESUBMITTED CLAIM DATED OCTOBER 22, 1965, YOU STATED THAT YOU
HAD REQUESTED PERSONNEL AT FORT ORD FOR A VERIFICATION OF THE LOCATION
OF YOUR NEW STATION AND YOU WERE ASSURED IT WAS LOCATED IN BEAUMONT,
TEXAS. IN TRANSMITTING YOUR CLAIM, COLONEL VIRE STATED THAT YOU WERE
TOLD BY PERSONS IN AUTHORITY AND WERE AUTHORIZED IN WRITING BY YOUR
PERSONNEL SECTION TO DRAW ADVANCE TRAVEL PAY FOR TRAVEL TO BEAUMONT,
TEXAS, AND THAT THE VOUCHER WAS PAID BY THE FINANCE SECTION AT THAT
STATION. ON THE BASIS THAT YOU WERE A PRIVATE WITH LESS THAN 3 MONTHS'
SERVICE AND IN VIEW OF THE ERRORS THAT WERE MADE BY THE PERSONNEL AND
FINANCE SECTIONS OF YOUR FORMER DUTY STATION, HE REQUESTED THAT
FAVORABLE CONSIDERATION BE GIVEN TO YOUR CLAIM.
UNDER THE PROVISIONS OF PARAGRAPH M4150, JOINT TRAVEL REGULATIONS,
PROMULGATED PURSUANT TO THE PERTINENT STATUTE, 37 U.S.C. 404, THE
GOVERNMENT'S OBLIGATION TO A MEMBER OF THE UNIFORMED SERVICES UPON
PERMANENT CHANGE OF STATION, IS TO FURNISH HIM WITH TRANSPORTATION IN
KIND OR REIMBURSEMENT THEREFOR ON A MILEAGE BASIS FROM HIS OLD TO HIS
NEW DUTY STATION. THE RIGHT OF MILITARY PERSONNEL TO REIMBURSEMENT OF
TRAVEL EXPENSES INCLUDING MILEAGE ALLOWANCE AND THE EXTENT OF SUCH
REIMBURSEMENT, IS DEPENDENT UPON THE PERFORMANCE OF OFFICIAL TRAVEL
DIRECTED BY COMPETENT ORDERS AND THE ESTABLISHMENT OF SUCH RIGHT
NECESSARILY MUST HAVE AS ITS BASIS, THE ORDERS DIRECTING THE SPECIFIC
TRAVEL.
THE ORDERS DATED JUNE 29, 1965, DIRECTING YOU TO REPORT TO YOUR NEW
DUTY STATION, THE WILLIAM BEAUMONT GENERAL HOSPITAL, TEXAS, REQUIRED THE
PERFORMANCE OF OFFICIAL TRAVEL ONLY TO THE CITY IN WHICH THE HOSPITAL
WAS LOCATED. THOSE ORDERS DID NOT DIRECT TRAVEL TO BEAUMONT, TEXAS.
THE FACT THAT THE ORDERS DID NOT SPECIFY THE CITY AND THAT YOU DID NOT
KNOW THE LOCATION OF YOUR NEW DUTY STATION, AFFORDS NO BASIS TO EXCEPT
YOU FROM THE PROVISIONS OF THE APPLICABLE REGULATIONS. FURTHERMORE,
WHILE UNFORTUNATE, THE FACT THAT YOU WERE ERRONEOUSLY ADVISED BY
PERSONNEL AT YOUR OLD DUTY STATION AS TO THE LOCATION OF THE HOSPITAL,
AFFORDS NO BASIS UPON WHICH WE MAY ALLOW YOUR CLAIM. IT IS A WELL
SETTLED PRINCIPLE OF LAW THAT IN THE ABSENCE OF A SPECIFIC STATUTORY
PROVISION, THE UNITED STATES IS NOT LIABLE FOR THE ERRONEOUS ACTS OF ITS
OFFICERS, AGENTS, OR EMPLOYEES, EVEN THOUGH COMMITTED IN THE PERFORMANCE
OF THEIR OFFICIAL DUTIES. SEE ROBERTSON V. SICHEL, 127 U.S. 507, 515;
GERMAN BANK V. UNITED STATES, 148 U.S. 573; 19 COMP. GEN. 503 AND 22
ID. 221. WHILE WE APPRECIATE THE CIRCUMSTANCES SURROUNDING YOUR TRAVEL,
PLEASE BE ADVISED THAT WE ARE REQUIRED TO SETTLE CLAIMS IN ACCORDANCE
WITH THE APPLICABLE PROVISIONS OF THE LAW AND REGULATIONS.
ACCORDINGLY, WE HAVE NO CHOICE OTHER THAN TO SUSTAIN THE SETTLEMENT
DATED OCTOBER 12, 1965, WHICH DISALLOWED YOUR CLAIM.
B-155936, DEC. 10, 1965
TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION:
WE HAVE HAD OCCASION RECENTLY TO EXAMINE SEVERAL SETTLEMENT
AGREEMENTS NEGOTIATED BY ONE OF THE CIVIL AGENCIES AFTER TERMINATION OF
FIXED-PRICE SUPPLY CONTRACTS FOR THE CONVENIENCE OF THE GOVERNMENT. THE
CONTRACTS NEITHER ORIGINALLY CONTAINED, NOR WERE AMENDED TO INCORPORATE
A TERMINATION FOR CONVENIENCE OF THE GOVERNMENT CLAUSE SUCH AS THAT
SHOWN IN FPR 1-8.701 (FPR 1-8.703 FOR CONSTRUCTION CONTRACTS). UNDER
FPR 1-8.700-2 (A) THE CLAUSE IS PRESCRIBED FOR USE ,WHENEVER AN AGENCY
CONSIDERS IT NECESSARY OR DESIRABLE" TO PROVIDE IN ITS CONTRACTS FOR
TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT. BY COMPARISON,
HOWEVER, ASPR 7-103.21 (ALSO SEE ASPR 8-701) MAKES THE USE OF A
TERMINATION FOR CONVENIENCE CLAUSE MANDATORY IN FIXED-PRICE SUPPLY
CONTRACTS OF AGENCIES OF THE DEPARTMENT OF DEFENSE (SEE ASPR 7-602.29
FOR CONSTRUCTION CONTRACTS), AND WE HAVE NOT BEEN APPRISED OF ANY
OVERRIDING DISADVANTAGES EXPERIENCED BY THAT DEPARTMENT IN GETTING OR
ADMINISTERING CONTRACTS DUE TO THE MANDATORY REQUIREMENT FOR THE
INCLUSION THEREIN OF SUCH A CLAUSE.
IN NEGOTIATING THE SETTLEMENT AGREEMENTS REFERRED TO THE SUBJECT
AGENCY ALLOWED AN AMOUNT FOR PROFIT APPROXIMATING THE FULL PROFIT
ANTICIPATED FOR THE ENTIRE CONTRACT ALTHOUGH ONLY A MINOR PORTION OF THE
WORK PROVIDED FOR BY THE CONTRACT WAS ACTUALLY PERFORMED. SUCH
ALLOWANCE WAS PREDICATED UPON THE POSITION THAT UNDER COMMON LAW THE
CONTRACTOR IS ENTITLED TO THE PROFIT ANTICIPATED UNDER A BREACHED
CONTRACT. SINCE THE SUBJECT CONTRACTS INVOLVED SEVERAL MILLION DOLLARS
THE AMOUNTS INCLUDED IN THE SETTLEMENT AGREEMENTS FOR ANTICIPATORY
PROFITS COMPRISED VERY SUBSTANTIAL SUMS AND WERE OUT OF PROPORTION TO
THE ACTUAL WORK PERFORMED AND TO THE BENEFITS DERIVED BY THE GOVERNMENT.
PARAGRAPH 1-8.301 (A) AND 1-8.303 (A) OF THE FEDERAL PROCUREMENT
REGULATIONS (AND SIMILAR PROVISIONS IN ASPR) DO NOT PERMIT ALLOWANCE OF
ANTICIPATED PROFIT ON UNPERFORMED WORK WHERE A TERMINATION FOR
CONVENIENCE CLAUSE IS CONTAINED IN THE CONTRACT, AND SET FORTH THE
PRINCIPLE THAT A SETTLEMENT SHOULD COMPENSATE THE CONTRACTOR FAIRLY FOR
THE WORK DONE AND THE PREPARATIONS MADE FOR THE TERMINATED PORTIONS OF
THE CONTRACT, INCLUDING AN ALLOWANCE FOR PROFIT THEREON WHICH IS
REASONABLE UNDER THE CIRCUMSTANCES. WE FEEL THAT SUCH PRINCIPLE
CONSTITUTES A FAIR AND ADEQUATE BASIS FOR SETTLEMENT OF THE PROFIT
ELEMENT IN CONTRACTS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT
AND WE PERCEIVE NO COGENT OR COMPELLING REASONS IN SUCH SITUATIONS FOR
AFFORDING SOME CONTRACTORS THE OPPORTUNITY TO GAIN ACCESS TO FULL
ANTICIPATORY PROFITS ON UNPERFORMED WORK THROUGH A DISCRETIONARY
EXCLUSION FROM THE CONTRACTS OF THE TERMINATION FOR CONVENIENCE CLAUSE.
WE UNDERSTAND YOUR AGENCY HAS PREVIOUSLY GIVEN CONSIDERATION TO
MAKING THE TERMINATION FOR CONVENIENCE CLAUSE MANDATORY BUT THAT BECAUSE
OF OBJECTIONS BY CERTAIN AGENCIES THE USE OF THE CLAUSE HAS BEEN
PERMITTED TO REMAIN OPTIONAL. SOME TIME HAS ELAPSED, HOWEVER, SINCE THE
ADOPTION OF THE OPTIONAL PROVISION AND WE THINK IT WOULD BE APPROPRIATE
FOR G.S.A. AND THE AFFECTED AGENCIES TO RECONSIDER THE DESIRABILITY OF
EFFECTING AN AMENDMENT TO THE FEDERAL PROCUREMENT REGULATIONS TO MAKE
MANDATORY UPON THE FEDERAL AGENCIES THE USE OF A TERMINATION FOR
CONVENIENCE CLAUSE IN THOSE FIXED-PRICE CONTRACTS WHERE ITS USE IS
CURRENTLY REQUIRED BY THE PROVISIONS OF
B-157151, DEC. 10, 1965
TO CHESAPEAKE INSTRUMENT CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4, 1965, RELATIVE TO OUR
DECISION B-157151, AUGUST 25, 1965, WHICH DENIED YOUR PROTEST AGAINST
THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS
(IFB) NO. 600-376-65, ISSUED APRIL 26, 1965, BY THE NAVY PURCHASING
OFFICE.
THE PROCUREMENT IN QUESTION INVOLVED THE PURCHASE OF 85 REGULATING
LINE AMPLIFIERS AND TECHNICAL MANUALS TOGETHER WITH PROVISIONING
DOCUMENTATION AND SPARE PARTS. THE RECORD SHOWED THAT YOU HAD FAILED TO
FURNISH TO THE DEPARTMENT OF THE NAVY, AS REQUIRED BY THE EXPRESS
PROVISIONS OF THE IFB, ADEQUATE DESCRIPTIVE DATA TO ENABLE THE
CONTRACTING OFFICER TO DETERMINE FROM YOUR BID WHETHER THE EQUIPMENT YOU
OFFERED WOULD MEET THE DEPARTMENT'S REQUIREMENTS AS SET FORTH IN THE
SPECIFICATIONS. ACCORDINGLY, OUR DECISION HELD THAT SUCH DEFICIENCY
CONSTITUTED A PROPER BASIS UNDER THE APPLICABLE PROCUREMENT STATUTE, 10
U.S.C. 2305 (C), AND ARMED SERVICES PROCUREMENT REGULATION (ASPR)
2-404.2 (A) FOR THE REJECTION OF YOUR LOW BID.
IN YOUR LETTER OF OCTOBER 4, YOU TAKE ISSUE WITH THE NAVY REPORT ON
THE MATTER OF THE ADEQUACY OF YOUR DESCRIPTIVE DATA. FOLLOWING IS A
LIST OF THE AREAS IN WHICH THE DEPARTMENT REPORTED DATA DEFICIENCIES IN
YOUR BID, YOUR COMMENTS THEREON, AND THE DEPARTMENT'S REPLY TO SUCH
COMMENTS:
1. "OFFERS NO NOMENCLATURE OR MANUFACTURER'S DATA.'
YOUR COMMENT: "THE REQUIREMENT AS LISTED IN THE REQUIREMENTS FOR
DESCRIPTIVE LITERATURE IS QUOTED AS FOLLOWS: "1. PHYSICAL DIMENSIONS,
MANUFACTURER, MODEL AND NOMENCLATURE, IF ANY.' CHESAPEAKE SUBMITTED A
PROPOSAL TO DESIGN AN INSTRUMENT MEETING THIS SPECIFICATION. THIS
INSTRUMENT DID NOT CARRY ANY NOMENCLATURE, AS IT WAS NOT NECESSARY TO
ASSIGN ANY FOR THE SIMPLE REASON THAT THE SPECIFICATION REQUIRED THIS TO
BE FURNISHED ONLY IF ANY EXISTED. THE INCLUSION OF THE WORDS "IF ANY"
ELIMINATE THE NEED FOR THIS INFORMATION. CONSEQUENTLY, IT IS APPARENT
THAT YOUR OBJECTION IS NOT VALID.'
NAVY REPLY: "CHESAPEAKE INSTRUMENT CORPORATION MISQUOTED THE
STATEMENT CONTAINED IN THE IFB BY INSERTING A COMMA BETWEEN
"NOMENCLATURE" AND "IF ANY.' "IF ANY" APPLIES ONLY TO THE WORD
,NOMENCLATURE" AND WAS INSERTED SINCE MANY MANUFACTURER'S PRODUCTS HAVE
NOT BEEN ASSIGNED AN NOMENCLATURE. HOWEVER THIS DID NOT DISPENSE WITH
THE REQUIREMENT CONCERNING THE MANUFACTURER AND MODEL. NO STATEMENT WAS
MADE AS TO WHETHER CHESAPEAKE ACTUALLY HAS OR HAS NOT MANUFACTURED SUCH
AN AMPLIFIER.'
(IT SHOULD BE NOTED THAT THE EXACT WORDING OF ITEM 1 IN THE
DESCRIPTIVE LITERATURE REQUIREMENT ON PAGE 3 OF THE IFB IS: "PHYSICAL
DIMENSIONS, MANUFACTURER, MODEL AND AN NOMENCLATURE IF ANY.''
2. "THE OVERALL POWER REQUIREMENTS OF 5 WATTS IS UNUSUALLY LOW IN
COMPARISON WITH EXISTING UNITS WHICH REQUIRE 25 OR MORE WATTS OF POWER.'
YOUR COMMENT: "UPON REEXAMINATION OF OUR SUBMITTED PROPOSAL
SCHEMATIC DIAGRAM AND POWER SUPPLY CONSUMPTION, WE HAVE REAFFIRMED THAT
THE POWER REQUIREMENT OF 5 WATTS IS CONSIDERABLY MORE THAN ADEQUATE FOR
THIS INSTRUMENT AS DESIGNED BY CHESAPEAKE. AN EVALUATION OF THE
CHESAPEAKE EQUIPMENT'S DESIGN AS SUBMITTED IN DETAIL BY A COMPETENT
ELECTRONICS ENGINEER WILL DISCLOSE THAT 5 WATTS INPUT POWER IS MORE THAN
ADEQUATE FOR THE EQUIPMENT'S OPERATION. IT APPEARS THAT OUR EQUIPMENT
WAS NOT EVALUATED ON ITS OWN MERIT BUT RATHER COMPARED TO DESIGNS OF
LESS EFFICIENCY.'
NAVY REPLY: "WHILE THE NAVY IS ALWAYS INTERESTED IN SAVING
ELECTRICAL POWER, A REVIEW OF THE ONLY ACCEPTABLE AMPLIFIER NOW USED BY
THE NAVAL SHORE ACTIVITIES, THE STELMA MODEL RA-12, SHOWS A POWER
REQUIREMENT OF 25 WATTS. SINCE CHESAPEAKE MADE NO MENTION OF INCREASED
EFFICIENCY RESULTING FROM A NEW DESIGN RADICALLY REDUCING THE POWER
REQUIREMENTS, IT WAS ASSUMED THAT CONVENTIONAL TECHNIQUES WERE INVOLVED.
LACKING THIS VITAL INFORMATION, IT BECAME MANDATORY TO USE EXISTING
KNOWLEDGE IN REACHING A JUDGMENT ON WHAT THE POWER REQUIREMENT SHOULD BE
IN ORDER TO MEET THE PERFORMANCE REQUIREMENTS OF THE SPEC.'
3. "NO DETAILS ARE GIVEN ON ALIGNMENT PROCEDURES.'
YOUR COMMENT: "PARAGRAPH 4, PAGE 1, OF OUR SUBMITTED DESCRIPTIVE
LITERATURE ADEQUATELY DESCRIBES AN ALIGNMENT PROCEDURE WHICH MAY BE
FOLLOWED BY ANY COMPETENT TECHNICIAN. THE POSITIVE STATEMENT "NO
DETAILS" IS NOT CORRECT.'
NAVY REPLY: "DETAILS AS TO SPECIFIC CONTROLS TO BE ADJUSTED AND
THEIR IDENTIFICATION IN THE SCHEMATIC WERE NOT FURNISHED. AS A MATTER
OF FACT, REFERENCE IS MADE TO AN "AGC" WHILE THE SCHEMATIC DOES NOT SHOW
SUCH A CONTROL. FURTHER, THE DETAILED STEPS AND THE ORDER TO BE
FOLLOWED IN REACHING AN ALIGNED POSITION ARE NOT DELINEATED. IN LIEU
THEREOF, CHESAPEAKE HAS INSERTED TWO GENERAL STATEMENTS INTO WHICH THE
EVALUATOR APPARENTLY IS EXPECTED TO READ SPECIFIC PROCEDURES. THE
EVALUATOR COULD MAKE NO SUCH ASSUMPTIONS.'
4. "IN CONNECTION WITH SAFETY FEATURES THERE IS NO DISCUSSION OF
GROUND CONDUCTORS OR GROUND POTENTIALS OF EXTERNAL METAL PARTS AS
REQUIRED BY MIL-E-16400.'
YOUR COMMENT: "THE REQUIREMENTS OF THE SOLICITATION CALLED OUT THAT
MIL-E-16400 APPLIED. CHESAPEAKE FULLY REALIZED THIS REQUIREMENT WAS
NECESSARY AND SUBMITTED OUR BID IN COMPLETE COMPLIANCE WITH THIS AND
OTHER APPLICABLE SPECIFICATIONS. IT IS NOT CUSTOMARY FOR BIDDERS TO
REITERATE EACH AND EVERY SPECIFICATION CALLED OUT IN APPLICABLE MILITARY
SPECIFICATIONS STATING POSITIVELY THAT THEY WILL COMPLY WITH INDIVIDUAL
REQUIREMENTS. THE FACT THAT WE SIGNED AND SUBMITTED A FULLY COMPLIANT
BID INDICATES THAT WE ARE NOT ONLY COGNIZANT OF BUT LEGALLY BOUND TO
MEET ALL SPECIFIED REQUIREMENTS.'
NAVY REPLY: "EXPERIENCE HAS SHOWN THAT A MERE STATEMENT OF
CONFORMANCE TO SUCH A SPEC. AS MIL-E-16400, HAS PRODUCED EQUIPMENT WHICH
WAS UNSAFE FOR HANDLING BY PERSONNEL UNDER A GIVEN CONDITION. THE
SPECIFIC REQUIREMENT FOR GROUND POTENTIAL OF ALL EXTERNAL METAL PARTS
AND THE INCLUSION OF A GROUND WIRE IN THE INTERCONNECTING CABLE ARE
MANDATORY REQUIREMENTS FOR THE SAFETY OF OPERATING PERSONNEL.
CHESAPEAKE DOES NOT SHOW AN APPRECIATION OF THIS REQUIREMENT IN HIS
PROPOSAL.'
5. "WHILE RFI SUPPRESSION IS DISCUSSED, THE BIDDER MAKES NO
REFERENCE TO AN ATTEMPT TO MEET MIL-I-16910 AS REQUIRED.'
YOUR COMMENT: "SAME AS 4. ABOVE.'
NAVY REPLY: "QUALITATIVE COMPLIANCE WITH THE REQUIREMENTS OF
MIL-I-16910 AS IT APPLIES TO THIS PARTICULAR SPECIFICATION IS NOT
ASSURED BY THE BIDDER'S APPROACH. COMPLETE COMPLIANCE, AS IS IMPLIED IN
THE APPLICABLE COMMENT, TO SPECIFICATION MIL-I-16910 IS NOT REQUIRED.
IN FACT, IN THIS PROCUREMENT IT IS SPECIFICALLY EXCEPTED IN PARAGRAPH
3.1.8 OF THE GOVERNING PURCHASE DESCRIPTION, PD 1462-120 DATED 28 JULY
1965.'
6. "THERE IS NO DISCUSSION OF THE FUNCTIONAL RELATIONSHIP BETWEEN
PARTS OF THE BLOCK DIAGRAM.'
YOUR COMMENT: "A DISCUSSION OF THE FUNCTIONAL RELATIONSHIP AS
REQUIRED APPEARS ON PAGE 5, PARAGRAPH 8, OF OUR SUBMITTED DESCRIPTIVE
LITERATURE. THE COMMENT ABOVE IS NOT CORRECT.'
7. "THERE IS NO TUTORIAL NARRATIVE ON THE SCHEMATIC DIAGRAM. IN
THIS CONNECTION NO REFERENCE IS MADE TO THE EXPANSION AND COMPRESSION
TIME CONSTANTS REQUIRED. THERE IS NO INDICATION AS TO LEVEL CONTROLS ON
THE AMPLIFIER CARDS. NO REFERENCE TO NOR DISCUSSION OF DISTORTION OR
FREQUENCY RESPONSES GIVEN.'
YOUR COMMENT: "ITEM 8 OF THE REQUIREMENTS FOR DESCRIPTIVE LITERATURE
IS AS FOLLOWS: "BLOCK AND SCHEMATIC DIAGRAMS WITH TUTORIAL NARRATIVES.'
OUR SUBMITTED DESCRIPTIVE LITERATURE CONTAINS BLOCK AND SCHEMATIC
DIAGRAMS AS REQUIRED. ON PAGE 5, PARAGRAPH 8 ENTITLED "BLOCK AND
SCHEMATIC DIAGRAM DISCUSSION," WE HAVE FULLY COMPLIED WITH THE
REQUIREMENTS THEREOF. AGAIN WE MUST POINT OUT THAT THE STATEMENT
CONTAINED ABOVE IS NOT CORRECT.'
NAVY REPLY TO YOUR COMMENTS ON 6 AND 7: "THE BLOCK DIAGRAM IS
MENTIONED AS BEING SHOWN IN FIGURE 2. THE DISCUSSION OF THE
RELATIONSHIP BETWEEN PARTS OF THIS DIAGRAM ARE GENERAL AND INADEQUATE.
A POINT-TO-POINT DISCUSSION OF FLOW FROM INPUT TO OUTPUT IS NOT
INCLUDED. FURTHER, THE INCLUSION OF SCHEMATIC DIAGRAM (SHOWN IN FIGURE
3) CONSIDERATIONS IN THE BLOCK DIAGRAM NARRATIVE IS NONCONFORMING, SINCE
THE IFB CALLED FOR NARRATIVES OF BOTH DIAGRAMS. OBVIOUS ERRORS ARE MADE
IN THE DISCUSSION OR IN THE DIAGRAM, OR BOTH. FOR EXAMPLE, THE
DISCUSSION OF THE BLOCK DIAGRAM INDICATES AN ATTENUATOR COMPOSED OF TWO
(2) DIODES LABELED FD-200 IN FIGURE 3. YET IN FIGURE 3 ARE SHOWN THREE
(3) DIODES LABELED FD-200 WITH NO EXPLANATION. FURTHERMORE, NARRATIVE
OF THE SCHEMATIC DIAGRAM IS NOT INCLUDED AND COULD NOT EVEN BE ASSUMED
BY THE EVALUATOR, SINCE MOST OF THE COMPONENTS ARE NOT IDENTIFIED.
DETAILED DISCUSSION OF EXPANSION AND COMPRESSION TIME CONSTANTS, LEVEL
CONTROLS, DISTORTION AND FREQUENCY RESPONSE IS MANDATORY FOR THIS
PROPOSAL BECAUSE THE AMPLIFIER COVERED BY THIS INVITATION IS A SPECIAL
TYPE AND NOT IN ORDINARY UFACTURE.'
8. "IN REGARD TO MECHANICAL DESIGN A VAGUE REFERENCE IS MADE TO THE
AC/DC POWER SUPPLY, BUT NONE OF ITS FEATURES SUCH AS THE REQUIRED
REMOVABILITY IS DISCUSSED. A POWER ALARM FAILURE LIGHT IS MENTIONED BUT
THERE IS NO DISCUSSION OF THE REQUIRED ALARM PROVISIONS. REQUIRED
REMOVABILITY OF PRINTED CIRCUIT AMPLIFIER CARDS IS NOT DISCUSSED HERE
NOR IS THE REQUIRED FEATURE OF TYING INPUTS AND OUTPUTS OF REMOVABLE
CARDS TOGETHER. THE REQUIREMENT OF STRAPPING TO REMOVE THE EXPANSION
FEATURE IS NOT DISCUSSED. THE ADJACENT USE OF DISSIMILAR METALS SUCH AS
ALUMINUM AND STEEL IN THE DOOR AND CASE RESPECTIVELY IS NOT IN KEEPING
WITH MIL-E-16400.'
YOUR COMMENT: "ON PAGE 2 OF OUR SUBMITTED DESCRIPTIVE LITERATURE, WE
SHOW AN ARTIST'S CONCEPT OF THE MECHANICAL DESIGN IN DETAIL. THE
REMOVABILITY OF THE AC/DC POWER SUPPLY IS A REQUIREMENT OF THE
SPECIFICATION AND WILL BE MET BY CHESAPEAKE. WHILE WE DID NOT
SPECIFICALLY DISCUSS THE REMOVABILITY FEATURE, IT IS CLEARLY A PART OF
THE BID SPECIFICATIONS BEYOND THE NEED FOR DISCUSSION AND OUR BID WAS
FULLY COMPLIANT WITH THAT SPECIFICATION. IN REGARD TO THE POWER ALARM
REQUIREMENTS, OUR SCHEMATIC DIAGRAM FIGURE 4, CLEARLY SHOWS AND LABELS
THE ALARM RELAY CONTACTS REQUIRED IN THE SPECIFICATION AND THE ALARM
CIRCUIT, INCLUDING A LIGHT. INASMUCH AS THIS IS SO CLEARLY SET FORTH IN
THE SCHEMATIC, WE FELT THERE WAS NO NEED TO BELABOR THE POINT.
MIL-E-16400 CLEARLY STATES THAT DISSIMILAR METALS MAY BE ASSEMBLED IN
INTIMATE CONTACT WITH EACH OTHER PROVIDING AN INTERPOSING MATERIAL
COMPATIBLE TO EACH SHALL BE USED. THEREFORE, THE STATEMENT THAT OUR
PROPOSAL IS NOT IN KEEPING WITH MIL-E-16400 IS NOT CORRECT.'
NAVY REPLY: "AS POINTED OUT BEFORE, A STATEMENT OF COMPLIANCE WITH
THE SPECIFICATION DOES NOT RELIEVE THE BIDDER OF THE REQUIREMENT FOR
SUBMISSION OF DETAILED DESCRIPTIVE LITERATURE. CHESAPEAKE DID SUBMIT A
SCHEMATIC WHICH REFERRED TO SOME OF THE TECHNICAL REQUIREMENTS LISTED IN
,H" ABOVE. THEY DID NOT, HOWEVER, MENTION THESE REQUIREMENTS IN THEIR
TECHNICAL DISSERTATION. DISCUSSION OF THE REQUIREMENTS IN THE FORM OF A
TECHNICAL DISSERTATION WAS REQUIRED BY THE IFB AND IS NECESSARY FOR
EVALUATION OF THE BID. FIGURE 1 IN CHESAPEAKE'S DESCRIPTION LITERATURE
SHOWS THE ADJACENT USE OF ALUMINUM AND STEEL, BUT DOES NOT INDICATE ANY
INTERPOSING MATERIAL IN ACCORDANCE WITH MIL-E-16400, NOR IS ANY
MENTIONED IN THEIR DISCUSSION.'
9. "THE REQUIREMENT FOR PROTECTIVE FINISHES IN ACCORD WITH
MIL-E-16400 IS IGNORED.'
YOUR COMMENT: "THERE IS NO SPECIFIC INSTRUCTION IN MIL-E-16400
ENTITLED "PROTECTIVE FINISHES.'
THERE IS A PARAGRAPH ENTITLED "COATING AND TREATMENTS" WHICH FULLY
DESCRIBES THE PROCESSES WHICH MUST BE USED. THE FACT THAT CHESAPEAKE
SUBMITTED A BID SIGNED BY AN OFFICER OF THE CORPORATION IS EVIDENCE OF
ITS INTENTION TO FULLY COMPLY WITH ANY AND ALL SPECIFICATION
REQUIREMENTS, INCLUDING MIL-E-16400, AS HEREINBEFORE POINTED OUT.'
NAVY REPLY: "CONCERNING "FINISH TO BE USED ON METAL SURFACES" PROPER
EVALUATION NECESSITATES DISCLOSURE OF MATERIALS ACTUALLY TO BE USED, IN
ADDITION TO A DISCUSSION OF THE APPROPRIATE FINISH. THE BIDDER DID NOT
COVER THE ABOVE IN RELATION TO THE REQUIREMENTS OF PARAGRAPH 3.6 OF
MIL-E-16400, AS REQUIRED. FOR EXAMPLE,"ARMOR COAT" IS NOT IDENTIFIED IN
MIL-E-16400 AND THE USE OF CHEMICAL TREATMENT OF ALUMINUM FOR GROUNDING
PURPOSES VERSUS ANODIZING IS NOT DISCUSSED.'
YOU CONTEND THAT NONE OF THE DEFICIENCIES WAS "ESSENTIAL" SO AS TO
JUSTIFY REJECTION OF YOUR BID UNDER ASPR 2-404.2 (A) FOR FAILURE TO
CONFORM TO ESSENTIAL REQUIREMENTS OF THE INVITATION. ADDITIONALLY, YOU
CONTEND THAT IN VIEW OF THE LARGE PRICE DIFFERENTIAL BETWEEN YOUR LOW
BID AND THE NEXT HIGHER BID, THERE WAS AN OBLIGATION ON THE PART OF THE
NAVY TO HAVE A PRE-AWARD EVALUATION GROUP MEET WITH YOU TO DISCUSS ANY
ALLEGED DATA INADEQUACY IN DETAIL.
WITH SPECIFIC REFERENCE TO THE SUCCESSFUL BIDDER, YOU ASSERT THAT THE
FACT THAT THE SAME BIDDER WAS AWARDED AN ADVERTISED CONTRACT IN JANUARY
1965 FOR THE SAME ITEM INDICATES THAT THE NAVY WANTS TO CONTINUE SUCH
BIDDER AS THE SUPPLIER OF THE EQUIPMENT AND THAT YOUR PROPOSAL WAS
DECLARED NONRESPONSIVE ON EITHER EXTREMELY MINOR OR NONEXISTENT GROUNDS.
FINALLY, YOU STATE THAT YOU ARE WILLING TO HAVE THE IFB AND YOUR BID
EVALUATED BY AN OUTSIDE ORGANIZATION AND YOU ARE CONFIDENT THAT SUCH
EVALUATION WILL CORROBORATE YOUR POSITION THAT YOU WERE FULLY RESPONSIVE
TO THE IFB AND SHOULD HAVE RECEIVED THE AWARD.
CONTRACTING AGENCIES ARE PRIMARILY RESPONSIBLE FOR THE DRAFTING OF
SPECIFICATIONS TO MEET THE GOVERNMENT'S NEEDS. WHEN IT IS ESSENTIAL TO
DETERMINE WHETHER ITEMS OFFERED TO THE GOVERNMENT MEET SUCH NEEDS, THERE
MAY BE INCLUDED IN THE INVITATION FOR BIDS A DESCRIPTIVE DATA
REQUIREMENT. FURTHER, A BID WHICH FAILS TO CONFORM TO A PROPERLY
UTILIZED DESCRIPTIVE DATA REQUIREMENT IS DEFECTIVE AND THE BIDDER MAY
NOT BE ALLOWED TO CURE THE DEFICIENCY AFTER BID OPENING SINCE SUCH
ACTION WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. 36 COMP.
GEN. 415; 37 ID. 763; 40 ID.
132. MOREOVER, A BLANKET OFFER OF COMPLIANCE WITH SPECIFICATIONS BY
A BIDDER WHO FAILS TO SUBMIT SUFFICIENT DESCRIPTIVE DATA REQUIRED FOR
BID EVALUATION UNDER AN INVITATION FOR THE PROCUREMENT OF HIGHLY
SPECIALIZED EQUIPMENT, WHICH ADVISES BIDDERS THAT FAILURE TO FURNISH
SUCH DATA WILL CAUSE BID REJECTION, DOES NOT OVERCOME OR RENDER NUGATORY
THE DATA REQUIREMENT OR THE EXTENT TO WHICH SUCH DATA WILL BE CONSIDERED
IN THE EVALUATION OF BIDS. 36 COMP. GEN. 415, 417. WE SEE NO BASIS
FOR DISAGREEING WITH THE NAVY'S DETERMINATION THAT THE REQUESTED DATA
WAS NECESSARY IN EACH OF THE AREAS SPECIFIED BY THE INVITATION FOR BIDS.
IN REGARD TO THE MATTER OF WHETHER NAVY SHOULD HAVE HELD A PREAWARD
DISCUSSION WITH YOU ON THE DEFICIENCIES IN YOUR BID DATA, YOUR ATTENTION
IS DIRECTED TO THE FACT THAT SINCE THIS WAS A FORMALLY ADVERTISED
PROCUREMENT THE NAVY COULD NOT HAVE ACCEPTED ANY ADDITIONAL DATA FROM
YOU AFTER BID OPENING. SUCH ACTION WOULD HAVE BEEN CLEARLY PREJUDICIAL
TO THE RIGHTS OF THE OTHER BIDDERS. NOR DOES THE DIFFERENCE IN PRICE
BETWEEN YOUR BID AND THE NEXT LOW RESPONSIVE BID JUSTIFY ANY EXCEPTION
IN THIS CASE, SINCE STRICT ADHERENCE TO THE ESTABLISHED COMPETITIVE
BIDDING PROCEDURES IS INFINITELY MORE IN THE PUBLIC INTEREST THAN ANY
PECUNIARY ADVANTAGE TO BE OBTAINED IN A PARTICULAR CASE BY PERMITTING
PRACTICES THAT DO VIOLENCE TO THE SPIRIT AND PURPOSE OF THE LAW. 37
COMP. GEN. 763, 767; 30 ID. 179; 17 ID. 554. ACCORDINGLY, IT WOULD
NOT APPEAR THAT ANY DISCUSSION YOU MIGHT HAVE HAD WITH THE NAVY COULD
HAVE AFFECTED THE RESPONSIVENESS OF YOUR BID INSOFAR AS THE DATA
DEFICIENCY WAS CONCERNED.
AS TO THE EFFECT OF THE PRIOR CONTRACT AWARD TO THE SUCCESSFUL BIDDER
FOR THE SAME ITEMS, YOU DO NOT ALLEGE ANY IMPROPRIETY IN THE PRIOR
PROCUREMENT. THERE IS NOTHING IN THE RECORD BEFORE US TO SUBSTANTIATE
YOUR ASSERTION THAT THE PRIOR PROCUREMENT EVIDENCES A DESIRE BY THE NAVY
TO CONTINUE THE SUCCESSFUL BIDDER ON THE INSTANT PROCUREMENT AS THE
SUPPLIER OF THE EQUIPMENT. IN VIEW THEREOF, IT DOES NOT APPEAR THAT THE
PRIOR AWARD HAS ANY PARTICULAR SIGNIFICANCE OTHER THAN TO INDICATE THAT
THE BIDDER PREVIOUSLY WAS FOUND RESPONSIVE TO THE NAVY'S NEEDS.
AS TO THE EMPLOYMENT OF AN OUTSIDE ORGANIZATION TO EVALUATE YOUR BID,
IT SHOULD BE NOTED THAT THE FUNCTION OF DETERMINING WHETHER ITEMS
OFFERED TO THE GOVERNMENT MEET ITS REQUIREMENTS AS SET FORTH IN THE
SPECIFICATIONS ISSUED BY THE CONTRACTING AGENCIES IS, LIKE THE FUNCTION
OF DRAFTING THE SPECIFICATIONS, THE PRIMARY RESPONSIBILITY OF THE
CONTRACTING AGENCIES. 17 COMP. GEN. 554. MOREOVER, WE ARE AWARE OF NO
AUTHORITY THAT WOULD PERMIT OUR OFFICE TO SUBSTITUTE THE JUDGMENT OR
OPINION OF AN OUTSIDE ORGANIZATION FOR THAT OF THE CONTRACTING AGENCY IN
SUCH MATTERS.
IN THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE REJECTION OF YOUR
BID BECAUSE OF YOUR FAILURE TO FULLY COMPLY WITH THE DATA PROVISION AND
THE AWARD TO THE NEXT LOW RESPONSIVE BIDDER WAS IN ACCORD WITH THE
APPLICABLE PROCUREMENT STATUTE AND REGULATIONS, AND WITH THE TERMS OF
THE IFB. ACCORDINGLY, OUR DECISION OF AUGUST 25 IS AFFIRMED.
B-157217, DEC. 10, 1965
TO INSTRUMENT SYSTEMS CORPORATION:
REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 3, 1965, WHEREIN YOU
TAKE EXCEPTION TO OUR STATEMENT IN DECISION B-157217, OCTOBER 11, 1965,
TO YOU REGARDING PREFERENCE GIVEN TO FIRMS REPRESENTING THAT OVER 50
PERCENT OF THE CONTRACT COST WOULD BE INCURRED IN A LABOR SURPLUS AREA
IN AWARDING THE SET-ASIDE PORTION OF THE INVOLVED CONTRACT. YOU STATE
THAT IT IS YOUR BELIEF THAT ASTRONAUTICS CORPORATION OF AMERICA WAS NOT
A LABOR SURPLUS AREA CONCERN WHEN THE PERTINENT INVITATION WAS EXECUTED
BY THAT BIDDER AND THAT IT DID NOT IN FACT HAVE AVAILABLE A FACILITY IN
HURLEY, WISCONSIN, AS WAS REPRESENTED IN ITS BID.
AFTER CITING APPLICABLE LAW, WE STATED IN OUR DECISION THAT DEFENSE
MANPOWER POLICY NO. 4 DIRECTS ALL PROCUREMENT AGENCIES "TO AWARD
NEGOTIATED PROCUREMENT CONTRACTS TO CONTRACTORS WHO WILL PERFORM A
SUBSTANTIAL PROPORTION OF THE PRODUCTION ON THOSE CONTRACTS WITHIN LABOR
SURPLUS AREAS.' WE HAVE STATED FURTHER THAT THE PURPOSE FOR WHICH AN
AWARD IS LIMITED TO LABOR SURPLUS AREA CONCERNS IS SERVED AS LONG AS THE
CONTRACTOR ABIDES BY ITS AGREEMENT AND PERFORMS IN AN AREA FALLING
WITHIN THE SAME CATEGORY AS THE AREA OF PERFORMANCE SHOWN IN ITS BID.
B-153267, JUNE 8, 1964. PARAGRAPH 1-801, ET SEQ., ARMED SERVICES
PROCUREMENT REGULATIONS (ASPR). IT IS UPON THE PROMISE TO SO PERFORM
THAT AN AWARD OF THIS NATURE MAY BE BASED AND WHETHER THE PLANT FACILITY
IS IN POSSESSION AT THE TIME THE PROMISE IS MADE IS NOT DETERMINATIVE OF
THE RIGHT TO AN AWARD. WE BELIEVE THAT THE FACILITIES MAY BE OBTAINED
AFTER AWARD OF THE CONTRACT PROVIDED THAT THE WORK IS PERFORMED IN A
LABOR SURPLUS AREA OF THE CATEGORY DESIGNATED BY THE BIDDER AND IN
ACCORDANCE WITH THE CONTRACT TERMS.
SINCE BOTH "PERSISTENT LABOR SURPLUS AREA CONCERN" AND "SUBSTANTIAL
LABOR SURPLUS AREA CONCERN" ARE DEFINED AS A CONCERN THAT AGREES TO
PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF A
CONTRACT IN PERSISTENT LABOR SURPLUS AREAS AND SUBSTANTIAL LABOR SURPLUS
AREAS, RESPECTIVELY (SEE ASPR 1-804/2 (B) (, THE ACTION TAKEN BY THE
NAVY PURCHASING OFFICE IN AWARDING THE SET-ASIDE PORTION OF THE CONTRACT
TO ASTRONAUTICS IN THE CIRCUMSTANCES PROVIDES NO BASIS FOR OBJECTION BY
THIS OFFICE.
B-157819, DEC. 10, 1965
TO THE SECRETARY OF COMMERCE:
REFERENCE IS MADE TO A LETTER DATED OCTOBER 1, 1965 (FILE A-3.12)
FROM THE ACTING HEAD, PROCUREMENT AND SUPPLY MANAGEMENT, ENVIRONMENTAL
SCIENCE SERVICES ADMINISTRATION, U.S. WEATHER BUREAU, REQUESTING A
DECISION AS TO WHETHER HAYES-KAUFMAN ASSOCIATES, INC., MAY BE RELIEVED
OF THE
OBLIGATION TO PERFORM CONTRACT NO. C2WB-4106, DATED AUGUST 20, 1965.
BY INVITATION NO. 1-WB-2-66 PREPARED ON STANDARD FORM 20 (JANUARY
1961), THE WEATHER BUREAU REGIONAL OFFICE, ENVIRONMENTAL SCIENCE
SERVICES ADMINISTRATION, FORT WORTH, TEXAS, SOLICITED BIDS, TO BE OPENED
AUGUST 16, 1965, FOR "ERECTION OF RADAR TOWER" AT ATHENS CLARKE COUNTY
AIRPORT, ATHENS, GEORGIA. UNDER THE CAPTION "DESCRIPTION OF WORK," THE
INVITATION STATED:
"FURNISH ALL LABOR AND MATERIALS REQUIRED TO ERECT A FIFTY FOOT
TRIANGULAR STEEL RADAR TOWER AND WORK ASSOCIATED THEREWITH AT ATHENS
CLARKE COUNTY AIRPORT, ATHENS, GEORGIA IN ACCORDANCE WITH ADDENDUM NO.
1, DRAWINGS, AND SPECIFICATIONS WHICH ARE ATTACHED. SITE INFORMATION
WILL BE FURNISHED BY THE METEOROLOGIST IN CHARGE, WEATHER BUREAU AIRPORT
STATION, ATHENS, GEORGIA.'
THE BID FORM, STANDARD FORM 21 (JUNE 1964), ATTACHED TO THE
INVITATION, GAVE THE NAME AND LOCATION OF THE PROJECT WITH RESPECT TO
WHICH THE BID WAS BEING SUBMITTED AS "ERECTION OF RADAR TOWER" AT THE
LOCATION INDICATED, AND IT WAS STATED THEREIN, IN PERTINENT PART, AS
FOLLOWS:
"IN COMPLIANCE WITH THE ABOVE-DATED INVITATION FOR BIDS, THE
UNDERSIGNED HEREBY PROPOSES TO PERFORM ALL WORK FOR ERECTION OF A FIFTY
FOOT TRIANGULAR STEEL RADAR TOWER AND ASSOCIATED WORK AT ATHENS CLARKE
COUNTY AIRPORT, ATHENS, GEORGIA, IN STRICT ACCORDANCE WITH THE GENERAL
PROVISIONS (STANDARD FORM 23-A), LABOR STANDARDS PROVISIONS APPLICABLE
TO CONTRACTS IN EXCESS OF $2,000 (STANDARD FORM 19-A), SPECIFICATIONS,
SCHEDULES, DRAWINGS, AND CONDITIONS, FOR THE FOLLOWING AMOUNT/S).'
THE FIRST PAGE OF ADDENDUM NO. 1 (REFERRED TO IN THE INVITATION)
BEARS THE TITLE "ADDENDUM NO. 1 TO PLANS AND SPECIFICATIONS FOR
ALTERATIONS AND ADDITIONS TO AIR TERMINAL * * * ATHENS-CLARKE COUNTY
AIRPORT.' IT SHOWS HEERY AND HEERY, INC., TO BE THE ARCHITECTS AND
ENGINEERS FOR THE PROJECT; IT REFERS TO SPECIFICATION "COMM. NO. 6552;
" AND IT IS STATED THEREON THAT THE ADDENDUM ,SHALL MODIFY AND TAKE
PRECEDENCE OVER THE ORIGINAL PLANS.' DRAWING NO. FW-311-60 WAS ENTITLED
,MODULATOR BUILDING AND RADAR TOWER," AND SHOWED THE PLANS OF BOTH
"EXISTING BUILDING" AND NEW CONSTRUCTION," THE LATTER OF WHICH INCLUDED
BOTH THE CONFIGURATION OF THE TOWER FOUNDATION AND A FOUR-ROOM ADDITION
TO THE EXISTING BUILDING. FOUR MINOR CHANGES IN THE PLANS FOR THE
ADDITION TO THE EXISTING BUILDING ARE DESCRIBED ON THE FIRST PAGE OF THE
ADDENDUM. FOLLOWING THE FIRST PAGE OF THE ADDENDUM AND ATTACHED THERETO
ARE "SPECIFICATIONS FOR ERECTION OF A FIFTY FOOT TRIANGULAR STEEL TOWER
AT ATHENS CLARKE COUNTY AIRPORT, ATHENS, GEORGIA," CONSISTING OF PAGES 1
THROUGH 7, WHEREIN DETAILED SPECIFICATIONS RELATING TO THE ERECTION OF
THE RADAR TOWER ARE SET FORTH. INSOFAR AS MATERIAL HERE, THE
SPECIFICATIONS FOR THE RADAR TOWER PROVIDE AS FOLLOWS:
"1. SCOPE
1.1 THESE SPECIFICATIONS ARE IN ADDITION TO AND FORM A PART OF THE
SPECIFICATIONS PREPARED BY HEERY AND HEERY, ARCHITECTS AND ENGINEERS,
TITLED ALTERATIONS AND ADDITIONS TO AIR TERMINAL, ATHENS CLARKE COUNTY
AIRPORT FOR U.S. DEPARTMENT OF COMMERCE, WEATHER BUREAU, DATED JUNE 25,
1965.
1.2 THIS ADDITIONAL SPECIFICATION COVERS THE FOLLOWING WORK:
A. CONSTRUCTION OF RADAR TOWER FOUNDATION.
B. ERECTION OF FIFTY FOOT TRIANGULAR STEEL TOWER.
C. INSTALLATION OF FIVE 2 INCH RIGID CONDUITS UP THE TOWER FROM THE
MODULATOR ROOM.
D. ASSEMBLY AND HOISTING RADOME AND ANTENNA TO TOP OF ASSEMBLED
RADAR TOWER.
2. CONSTRUCTION OF RADAR TOWER FOUNDATIONS
2.1 APPLICABLE DRAWINGS
A. DRAWING FW-311-60, TO SHOW LOCATION OF FOUNDATION.
B. DRAWING SF-467-2, DIMENSIONS OF FOUNDATION.
C. DRAWING FW-260-110, REINFORCING STEEL, ANCHOR BOLTS, AND BEARING
PLATE SCHEDULE.
D. DRAWING SF-467-2A, FOUNDATION DIMENSION MODIFICATION FOR FIFTY
FOOT TOWER (TWO COPIES AVAILABLE TO PROSPECTIVE BIDDERS IN THE OFFICE OF
THE WEATHER BUREAU AIRPORT STATION AT ATHENS, GEORGIA).
2.2 REQUIREMENTS
2.2.1 THE CONTRACTOR SHALL CONSTRUCT THE FOUNDATION IN STRICT
CONFORMITY WITH THE DRAWINGS AND SPECIFICATIONS. THE DIMENSIONS SHOWN
ARE CRITICAL AND MUST BE ADHERED TO. THE EXACT SITE AND ORIENTATION ARE
AS SHOWN ON DRAWING FW-311-60. THE DISTANCES BETWEEN PIERS ARE SHOWN ON
DRAWING SF-467-2A.'
"2.3 MATERIALS
2.3.1 SECTION 3A OF THE BASIC SPECIFICATIONS TITLED ALTERATIONS AND
ADDITIONS TO AIR TERMINAL ATHENS CLARKE COUNTY AIRPORT FOR U.S.
DEPARTMENT OF COMMERCE, WEATHER BUREAU, DATED JUNE 25, 1965, SHALL BE
COMPLIED WITH IN REGARD TO THE FOUNDATION.'
"3. ERECTION OF 50 FOOT TRIANGULAR STEEL TOWER"
"3.2 REQUIREMENTS"
"3.2.3 THE TOWER IS TRIANGULAR APPROXIMATELY 67 FEET HIGH, AND IS
FABRICATED CHIEFLY OF ANGLE MEMBERS WITH SOLID, ROUND RODS AS DIAGONAL
BRACING. IT IS STORED AT THE ATHENS CLARKE COUNTY AIRPORT NEAR THE
INSTALLATION SITE. ONLY THE TOP 50 FEET OF THE TOWER SHALL BE ERECTED.
THE LOWER SECTION SHALL BE STORED AS DIRECTED BY THE WEATHER BUREAU
REPRESENTATIVE. * * *"
"3.2.5 THE TOWER SHALL BE ERECTED ON THE FOUNDATIONS DESCRIBED IN
SECTION 2 OF THESE SPECIFICATIONS. ORIENT THE TOWER ON FOUNDATIONS AS
SHOWN ON DRAWING FW-311-60.
3.2.6 THE TOP PLATFORM OF THE TOWER AS SHOWN IN THE ATTACHED
PHOTOGRAPH HAS BEEN MODIFIED. THE MODIFICATION TO THE ORIGINAL
PLATFORM, WHICH THE CONTRACTOR SHALL ERECT, CONSISTS ESSENTIALLY OF A
STEEL CHANNEL RING APPROXIMATELY 12 FEET 6 INCHES IN DIAMETER, MOUNTED
ON THE HORIZONTAL MEMBERS OF THE ORIGINAL PLATFORM, AND A SUPPORT FOR
THE RADAR ANTENNA AND FLOOR. THE STAIRS HAVE BEEN MOVED INWARD A SHORT
DISTANCE. ERECTION DRAWINGS OF THE MODIFIED PLATFORM WILL BE AVAILABLE,
BOTH FOR BID AND ERECTION PURPOSES. * * *"
ATTACHED TO THE ADDENDUM ARE DRAWING NO. FW-311-60 WHICH IS
IDENTIFIED ABOVE, DRAWING NO. SF-467-2 ENTITLED "FOUNDATION FOR 70 FEET
0 INCHES TRIANGULAR STEEL RADAR TOWER," DRAWING NO. FW-260-110 ENTITLED
"REINFORCING STEEL, ANCHOR BOLTS, BEARING PLATES 70 FEET 0 INCHES
TRIANGULAR TOWER," AND A PHOTOGRAPH OF A "TEMPERATE TOWER AB-467/FPS-14
DESIGNED BY DRESSER-IDECO," ETC.
FURNISHED WITH THE INVITATION, ALONG WITH THE ADDENDUM, WAS A COPY OF
THE SPECIFICATIONS PREPARED BY HEERY AND HEERY FOR "ALTERATIONS AND
ADDITIONS TO AIR TERMINAL, ATHENS-CLARKE COUNTY AIRPORT," DATED JUNE 25,
1965, AND RELATED WORKING DRAWINGS NOS. 1 AND 2, DATED MAY 31, 1965,
BEARING THE SAME TITLE, PREPARED BY THAT FIRM. THE ONLY REFERENCE IN
THE SPECIFICATIONS OF JUNE 25, 1965, TO THE RADAR TOWER IS CONTAINED IN
SECTION 1B-3 THEREOF WHICH SETS FORTH THE MINIMUM HOURLY WAGE RATES
REQUIRED TO BE PAID TO WORKERS EMPLOYED AT THE SITE IN CONNECTION WITH
,INSTALLATION OF RADAR TOWER AND EQUIPMENT" UNDER DECISION NO.
AD-13,992, DATED MAY 11, 1965, OF THE SECRETARY OF LABOR, EXPIRING
SEPTEMBER 8, 1965. HOWEVER, A CONFIGURATION OF THE FOUNDATION FOR A "50
FOOT TOWER," INDICATING PRECISELY WHERE IT IS TO BE LOCATED AT THE
AIRPORT, APPEARS ON THE REFERRED-TO DRAWING NO. 1, AND INTERESTED
PARTIES ARE ADVISED TO "SEE WEATHER BUREAU DWGS FOR TOWER DETAILS.'
IN A BID SUBMITTED UNDER DATE OF AUGUST 12, 1965, HAYES-KAUFMAN
ASSOCIATES, INC., OFFERED TO PERFORM THE WORK INVOLVED FOR THE LUMP-SUM
PRICE OF $13,625. THE OTHER FIVE BIDS RECEIVED IN RESPONSE TO THE
INVITATION WERE IN THE AMOUNTS OF $18,849, $21,450, $30,515, $34,627 AND
$55,000, RESPECTIVELY.
IT APPEARS THAT, IN VIEW OF THE DISPARITY BETWEEN THE AMOUNT OF
HAYES-KAUFMAN'S BID AND THE AMOUNTS OF THE OTHER BIDS, THE CONTRACTING
OFFICER REQUESTED A CONFIRMATION OF THE BID. UPON RECEIVING
CONFIRMATION, THE CONTRACT WAS AWARDED TO HAYES-KAUFMAN, WHICH EXECUTED
A FORMAL CONTRACT FOR PERFORMANCE OF THE WORK ON AUGUST 20, 1965. THE
FORMAL CONTRACT, PREPARED ON STANDARD FORM 23 (CONSTRUCTION CONTRACT),
JANUARY 1961 EDITION, SET FORTH, UNDER THE HEADING "WORK TO BE
PERFORMED," THE FOLLOWING:
"FURNISH ALL LABOR AND MATERIAL NECESSARY FOR ERECTION OF A FIFTY
FOOT TRIANGULAR STEEL RADAR TOWER AND ASSOCIATED WORK AT ATHENS CLARKE
COUNTY AIRPORT, ATHENS, GA.'
IT FURTHER APPEARS THAT ON SEPTEMBER 7, 1965, HAYES-KAUFMAN RECEIVED
A PROPOSAL DATED SEPTEMBER 1, 1965, FROM ENGLAND ELECTRIC COMPANY,
ATHENS, GEORGIA, WHEREIN ENGLAND OFFERED TO PERFORM ALL OF THE
ELECTRICAL WORK REQUIRED TO BE DONE UNDER THE SUBJECT SPECIFICATIONS FOR
THE SUM OF $4,855. SINCE THIS AMOUNT WAS MUCH GREATER THAN
HAYES-KAUFMAN ANTICIPATED, IT IMMEDIATELY CONTACTED THE CONTRACTING
OFFICER AND REQUESTED ADVICE AS TO WHETHER THE WORK UNDER THE CONTRACT
INCLUDED THE CONSTRUCTION OF A BUILDING. UPON RECEIVING AN AFFIRMATIVE
ANSWER, THE CONTRACTOR ADVISED THAT IT HAD MISINTERPRETED THE
SPECIFICATIONS IN THIS RESPECT AND HAD NOT INCLUDED THE COST OF A
BUILDING IN THE ESTIMATE WHICH FORMED THE BASIS FOR ITS BID, AND BY
LETTER OF SEPTEMBER 9, 1965, THE CONTRACTOR SUBMITTED ITS FORMAL PROTEST
TO THE CONTRACTING AGENCY SEEKING TO BE RELIEVED OF THE OBLIGATION OF
PERFORMING THE CONTRACT ON THE GROUND OF MISTAKE.
THE EVIDENCE FURNISHED TO THE CONTRACTING AGENCY BY HAYES-KAUFMAN IN
SUPPORT OF THE PROTEST LEAVES NO ROOM FOR DOUBT THAT IT FAILED TO
INCLUDE IN ITS BID ANY AMOUNT TO COVER THE COST OF PERFORMING ANY OF THE
WORK COVERED BY THE SPECIFICATIONS OTHER THAN THAT WHICH WOULD BE
INVOLVED IN ERECTING THE RADAR TOWER.
IN ITS LETTER OF SEPTEMBER 9, 1965, HAYES-KAUFMAN STATES THAT IT
INTERPRETED THE INVITATION AS CALLING FOR BIDS FOR THE ERECTION OF A
RADAR TOWER ONLY FOR THE FOLLOWING REASONS:
"THE SCOPE 1.2 PREPARED BY THE WEATHER BUREAU CLEARLY DEFINES THE
CHARACTER OF THE COMPLETED RADAR TOWER. IT IS WELL WRITTEN AND
COMPREHENSIVE. THE ONLY APPARENT REFERENCE IN ALL THE BID DOCUMENTS
THAT TIES THE BUILDING CONSTRUCTION TO TOWER ERECTION APPEARS TO BE
LINES ONE AND TWO OF SCOPE 1.1; YET ON THE SAME PAGE 2.3.1, LINES THREE
AND FOUR, IT STATES (HEERY'S SPECIFICATIONS) SHALL BE COMPLIED WITH IN
REGARD TO THE FOUNDATION. THIS ADDITIONAL REFERENCE APPEARED
DEFINITIVE. WE INTERPRETED THIS REFERENCE TO BE A DEFINITIVE POINT OF
REFERENCE IN HEERY'S SPECIFICATIONS THAT WE SHOULD COMPLY WITH TO THE
EXCLUSION OF OTHER PARTS.
"THE SPECIFICATIONS TITLED "ALTERATIONS AND ADDITIONS TO AIR
TERMINAL," GENERAL CONDITIONS, ARE STANDARD A.I.A. (AMERICAN INSTITUTE
OF ARCHITECTS) AND ARE INCONSISTENT WITH AND WE DID NOT BELIEVE
COMPATIBLE WITH GOVERNMENTAL GENERAL PROVISIONS, STANDARD FORM 23-A AND
IT APPEARED THAT THEY WERE INDEED A SEPARATE JOB. THE SIZE AND OBVIOUS
PHYSICAL DIFFERENCE BETWEEN THE TWO SPECIFICATIONS MISLED US FURTHER.
WE HAVE NEVER COMPLETED A CONTRACT FOR THE FEDERAL GOVERNMENT WHEREIN
A.I.A. GENERAL CONDITIONS PRE-EMPTED BOTH FORM 23-A AND FORM 21.
FURTHER, ITEMS IN HEERY'S SPECIFICATIONS RE DAVIS BACON, ANTI-KICKBACK
ETC. WERE REDUNDANT SINCE THE WEATHER BUREAU HAD INCLUDED THE USUAL
STANDARD FORMS IN THEIR SPECIFICATIONS,"ERECTION OF A FIFTY FOOT
TRIANGULAR STEEL RADAR TOWER.' HEERY'S SPECIFICATIONS AND THE SPECIAL
CONDITIONS FOR "ERECTION OF A FIFTY FOOT TRIANGULAR STEEL RADAR TOWER"
ARE INCONSISTENT. WE GAVE ALL THE WEIGHT TO THE WEATHER BUREAU
SPECIFICATIONS ONLY WHERE SPECIFICALLY TOLD TO DO SO IN THE WEATHER
BUREAU SPECIFICATIONS.
"THE BID WE SUBMITTED WAS FOR "ERECTION OF A FIFTY FOOT TRIANGULAR
STEEL RADAR TOWER.' THIS BID WAS ALSO BASED ON OUR EXPERIENCE IN BIDDING
IFB NO. 3-WB-2-65, ERECTION OF RADAR TOWER AT LUBBOCK, TEXAS, DATED 18
MAY 1965 AND IFB NO. 2-WB-2-65, ERECTION OF RADAR TOWER AT SAN ANGELO,
TEXAS DATED 5 APRIL 1965. NEITHER OF THESE CONTRACTS INCLUDED A
BUILDING AND BOTH THESE TWO AND THE ATHENS IFB WERE IDENTICALLY TITLED
IN THE DEPARTMENT OF COMMERCE PUBLICATION, OUR SOURCE OF WORK AVAILABLE.
HAD THE BID TITLE READ "ERECTION OF FIFTY FOOT TRIANGULAR STEEL RADAR
TOWER AND ADDITION TO AIR TERMINAL," WE WOULD NOT HAVE BID THE PROJECT
FOR THE REASON THAT WE ARE NOT BUILDING CONTRACTORS AND THE BUILDING
APPEARS TO BE A MAJOR PART OF THIS CONTRACT.'
CONSIDERING THE MANNER IN WHICH THE WORK TO BE PERFORMED WAS REFERRED
TO AND DESCRIBED IN THE INVITATION, INCLUDING ADDENDUM NO. 1 AND THE
APPLICABLE DRAWINGS, WE DO NOT BELIEVE THE INTERPRETATION PLACED UPON
THE INVITATION AND THE SPECIFICATIONS BY HAYES-KAUFMAN CAN BE CONSIDERED
UNREASONABLE. MOREOVER, THE DESCRIPTION OF THE WORK AS CONTAINED IN THE
FORMAL CONTRACT EXECUTED BY THE PARTIES, WHICH WAS PREPARED BY THE
GOVERNMENT AND SENT TO HAYES-KAUFMAN FOR EXECUTION, WAS NOT INCONSISTENT
WITH THE LATTER'S INTERPRETATION AS TO THE SCOPE OF THE WORK. NOT ONLY
DID THE SUBJECT INVITATION AND BID FORM REFER TO AND DESCRIBE THE WORK
TO BE PERFORMED AS THE "ERECTION OF A FIFTY FOOT TRIANGULAR STEEL RADAR
TOWER AND ASSOCIATED WORK," WITHOUT MENTIONING ANY ALTERATIONS AND
ADDITIONS TO BE MADE TO THE AIR TERMINAL BUILDING, BUT THE WORK APPEARS
TO HAVE BEEN ADVERTISED IN THE DEPARTMENT OF COMMERCE PUBLICATION
REFERRED TO IN THE CONTRACTOR'S LETTER AS "ERECTION OF RADAR TOWER.'
WHILE IT APPEARS THAT A RE-EXAMINATION OF THE INVITATION AND
SPECIFICATIONS BY HAYES-KAUFMAN FOLLOWING THE CONTRACTING OFFICER'S
REQUEST FOR CONFIRMATION OF THE BID SHOULD HAVE ALERTED THE BIDDER TO
THE POSSIBILITY THAT THE WORK REQUIRED TO BE PERFORMED INCLUDED
ALTERATIONS AND ADDITIONS TO THE AIR TERMINAL, AS WELL AS THE ERECTION
OF THE RADAR TOWER, A PERSUASIVE ARGUMENT CAN BE MADE TO THE CONTRARY.
IN VIEW THEREOF, AND OF HAYES-KAUFMAN'S PREVIOUS EXPERIENCE IN BIDDING
UPON WEATHER BUREAU CONTRACTS WHICH INVOLVED SOLELY THE ERECTION OF
RADAR TOWERS, THE CONTRACTOR'S FAILURE TO DETECT ITS MISTAKE IS
UNDERSTANDABLE, PARTICULARLY SINCE IT HAD PLANNED TO SUBCONTRACT THE
ENTIRE JOB OF ERECTING THE RADAR TOWER TO ANOTHER CONCERN FROM WHOM IT
HAD A FIRM BID AND APPARENTLY MADE NO INSPECTION OF THE WORK TO BE
PERFORMED ITSELF.
IT HAS BEEN HELD THAT WHERE, AS HERE, A CONTRACTOR'S FAILURE TO
UNDERSTAND WHAT IS REQUIRED OF IT UNDER A CONTRACT IS ATTRIBUTABLE TO
THE FAULTY OR AMBIGUOUS MANNER IN WHICH THE GOVERNMENT HAS DESCRIBED THE
WORK IN THE INVITATION, OR ACCOMPANYING SPECIFICATIONS, THE GOVERNMENT
IS WITHOUT ANY BASIS TO INSIST UPON THE CONTRACTOR'S PERFORMING THE
CONTRACT IN ACCORDANCE WITH THE GOVERNMENT'S INTERPRETATION THEREOF---
THOUGH THE LATTER MAY BE THE MOST REASONABLE ONE--- FOR THE ORIGINAL
COMPENSATION NAMED. SEE ABE L. GREENBERG CO. V. UNITED STATES (1962),
300 F.2ND 443, 156 CT.CL. 434.
ACCORDINGLY, YOU ARE ADVISED THAT THE CONTRACT ENTERED INTO WITH
HAYES-KAUFMAN ASSOCIATES, NC., SHOULD BE CANCELLED WITHOUT COST TO THE
CONTRACTOR. THE ENCLOSURES TRANSMITTED WITH THE LETTER FROM THE ACTING
HEAD, PROCUREMENT AND SUPPLY MANAGEMENT, ENVIRONMENTAL SCIENCE SERVICES
ADMINISTRATION, U.S. WEATHER BUREAU, ARE RETURNED.
B-157845, DEC. 10, 1965
TO ASSOCIATION FILMS, INC. :
YOUR LETTER OF OCTOBER 12, 1965, WITH ENCLOSURES, REQUESTS
EXTRAORDINARY CONTRACTUAL RELIEF PURSUANT TO PUBLIC LAW 85-804, APPROVED
AUGUST 28, 1958, 72 STAT. 972, 50 U.S.C. 1431-1435, TO AUTHORIZE
PAYMENT TO YOU OF THE AMOUNT OF $8,431 FOR SERVICES RENDERED TO THE
NATIONAL AERONAUTICS
AND SPACE ADMINISTRATION (NASA).
UNDER CONTRACT NO. NAS W-371, (NASA HEADQUARTERS) DATED FEBRUARY 8,
1962, YOU AGREED TO PROVIDE NECESSARY MATERIALS AND SERVICES TO PROMOTE
AND EFFECT THE MAXIMUM DISTRIBUTION THROUGHOUT THE UNITED STATES OF A
NASA MOTION PICTURE SHOWING A MANNED ORBITAL FLIGHT OF A MERCURY
CAPSULE. THE CONTRACT ORIGINALLY COVERED A 12-MONTH PERIOD AND
AUTHORIZED UP TO 500 TELEVISION (TV) SHOWINGS AND 5,000 NONTHEATRICAL
BOOKINGS AT PRESCRIBED UNIT PRICES NOT TO EXCEED A TOTAL PAYMENT OF
$18,900.
BY VARIOUS AMENDMENTS TO THE CONTRACT, THE NUMBER OF TV SHOWINGS WAS
INCREASED TO A MAXIMUM OF 1,125; THE NUMBER OF NONTHEATRICAL BOOKINGS
WAS INCREASED TO A MAXIMUM OF 25,201; AND THE CEILING PRICE FOR THE
SHOWINGS AND BOOKINGS WAS RAISED TO $75,127.50. IN ADDITION, THE
CONTRACT TERMINATION DATE WAS EXTENDED, THE FINAL EXTENSION TO DECEMBER
31, 1963, BEING EFFECTED BY AN AMENDMENT ISSUED IN JUNE 1963.
THE FILE FORWARDED BY YOU INDICATES THAT ON DECEMBER 18, 1963, THE
NASA TECHNICAL MONITOR FOR THE CONTRACT DISCUSSED THE CONTRACT WITH A
VICE PRESIDENT OF YOUR FIRM AND ADVISED HIM TO MAKE SURE THAT ADVANCE
BOOKINGS DID NOT EXCEED THE MAXIMUM FUNDING IN THE CONTRACT. IN
RESPONSE THERETO, THE FILE INDICATES THAT YOUR VICE PRESIDENT STATED
THAT HE WOULD HAVE THE BOOKINGS STOPPED IN PLENTY OF TIME. IN THIS
CORRECTION, YOU STATE THAT WHILE YOU THEN STOPPED ACCEPTING BOOKINGS,
YOU ELECTED TO HONOR MORE THAN 3,000 EXCESS BOOKINGS ALREADY MADE FOR
DATES BEYOND DECEMBER 31. THE BASIS FOR YOUR ACTION, YOU STATE, WAS TO
INDICATE GOOD FAITH TO THE PARTICIPATING ORGANIZATIONS THAT HAD ORDERED
THE BOOKINGS.
THE AMOUNT OF YOUR CLAIM, $8,431, IS SAID TO COVER 3,864 BOOKINGS AND
52 TELECASTS HONORED AFTER THE TERMINATION DATE. YOU CONTEND THAT
CERTAIN "VERBAL AMBIGUITIES" AND REQUESTS BY NASA PERSONNEL LED YOUR
COMPANY TO BELIEVE THAT THE CONTRACT MIGHT BE EXTENDED BEYOND DECEMBER
31, 1963. YOU STATE THAT IN DECEMBER 1963, THE NASA TECHNICAL MONITOR
REQUESTED YOU TO FURNISH A PERFORMANCE SUMMARY ON TWO NASA FILMS YOU
DISTRIBUTED AND A RECOMMENDATION FOR THEIR CONTINUANCE, STRESSING ANY
ECONOMIES OR EFFICIENCIES THAT MIGHT BE MADE. THIS REQUEST, YOU SAY,
WAS COMPLIED WITH BUT ACTION WAS NEVER TAKEN ON CONTINUATION OF
DISTRIBUTION. YOU ALSO ASSERT THAT YOU WERE NEVER ADVISED THAT
TERMINATION WAS DEFINITE. HOWEVER, YOU CONCEDE THAT THE TECHNICAL
MONITOR DID VERBALLY ADVISE YOU THAT THE CONTRACT MIGHT NOT BE RENEWED.
FINALLY, YOU CONTEND THAT NASA HAS RECEIVED THE BENEFIT OF YOUR
SERVICES.
THE FILE FORWARDED BY YOU SHOWS THAT YOUR CLAIM WAS PREVIOUSLY FILED
WITH NASA UNDER PUBLIC LAW 85-804 AND THAT BY A MEMORANDUM OF DECISION
DATED MAY 28, 1965, THE NASA CONTRACT ADJUSTMENT BOARD DENIED THE
REQUESTED RELIEF. THE BOARD FOUND THAT PRIOR TO THE TERMINATION DATE,
YOU HAD EXCEEDED THE 25,201 LIMIT ON NONTHEATRICAL BOOKINGS WITH THE
RESULT THAT THE CEILING PRICE OF $75,127.50 (WHICH WAS BASED ON THE
NUMBER OF AUTHORIZED BOOKINGS AND SHOWINGS MULTIPLIED BY THE UNIT PRICES
SET FORTH IN THE CONTRACT), WAS ALSO EXCEEDED. THE BOARD FURTHER FOUND
THAT NOTWITHSTANDING THE CONTRACT LIMITATIONS HAD BEEN REACHED AND THAT
THE CONTRACTING OFFICER HAD SERVED YOU WITH A WRITTEN REMINDER ON
DECEMBER 23, 1963, REGARDING THE CONTRACT LIMITATIONS AND TERMINATION
DATE, YOU HONORED THE EXCESS BOOKINGS WITHOUT NASA'S CONSENT. WITH
RESPECT TO NASA'S REQUEST ON DECEMBER 18, 1963, THAT YOU SUBMIT A
PERFORMANCE REPORT, THE BOARD STATED THAT TWO SUCH REPORTS WERE RECEIVED
FROM YOU ON JANUARY 2, 1964, BUT NO ACTION WAS TAKEN TO EXTEND THE
CONTRACT.
WHILE THE BOARD FOUND THAT THE EXECUTION OF PREVIOUS CONTRACT
AMENDMENTS MIGHT HAVE JUSTIFIED, TO A DEGREE, YOUR BELIEF THAT THE
CONTRACT PERIOD WOULD BE EXTENDED, WITH ADDITIONAL BOOKINGS AND FUNDS
AVAILABLE, DENIAL OF YOUR CLAIM WAS BASED ON THE FACT THAT YOU EXCEEDED
THE AUTHORIZED CONTRACT LIMITATIONS WITHOUT NASA'S CONSENT AND WITH
CLEAR NOTICE THAT THE CONTRACT MIGHT NOT BE FURTHER EXTENDED.
OUR OFFICE IS NOT ONE OF THE GOVERNMENT AGENCIES AUTHORIZED BY PUBLIC
LAW 85-804 AND IMPLEMENTING EXECUTIVE ORDERS TO GRANT EXTRAORDINARY
CONTRACTUAL RELIEF TO FACILITATE THE NATIONAL DEFENSE. ACTIONS TAKEN BY
GOVERNMENT AGENCIES PURSUANT TO THE AUTHORITY OF PUBLIC LAW 85-804 ARE
CONSIDERED BY US TO BE BINDING UPON OUR OFFICE. CONSIDERATION OF YOUR
CLAIM BY OUR OFFICE, THEREFORE, MUST REST ON A DETERMINATION WHETHER
THERE EXISTS A SUFFICIENT LEGAL BASIS INDEPENDENT OF PUBLIC LAW 85-804
FOR THE ALLOWANCE OF THE CLAIM FROM APPROPRIATED FUNDS.
IT IS AXIOMATIC THAT NO PERSON, BY HIS VOLUNTARY ACT, MAY CONSTITUTE
THE GOVERNMENT HIS DEBTOR.
17 COMP. GEN. 530, 532. UTICA, ITHACA AND ELMIRA RAILWAY CO. V.
UNITED STATES, 22 CT.CL. 265. MOREOVER, WHERE A WRITTEN AGREEMENT
BETWEEN CONTRACTING PARTIES IS SEEMINGLY COMPLETE, A COURT WILL NOT
LIKELY IMPLY AN ADDITIONAL COVENANT ENLARGING ITS TERMS. RYDER TRUCK
RENTAL, INC. V. CENTRAL PACKING CO., 341 F.2D 321. SEE, ALSO, THE
LACCHI CONSTRUCTION CO., INC. V. UNITED STATES, 102 CT.CL. 324, 356.
ON THE FACTS OF RECORD, IT IS APPARENT THAT THE EXCESS BOOKINGS AND
TELECASTS WERE VOLUNTARILY HONORED BY YOU WITH FULL KNOWLEDGE THAT THERE
WAS NEITHER AN EXPRESS NOR AN IMPLIED OBLIGATION ON THE PART OF THE
GOVERNMENT TO COMPENSATE YOU FOR ANY EXPENSE THEREBY INCURRED.
ACCORDINGLY, WE FIND NO LEGAL BASIS FOR THE PAYMENT OF YOUR CLAIM, AND
IT IS, THEREFORE, DENIED.
B-157874, DEC. 10, 1965
TO CAPTAIN BERNARD PASSMAN, USAFR, MC:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 6, 1965,
REQUESTING REVIEW OF THE SETTLEMENT OF SEPTEMBER 10, 1965, WHICH
DISALLOWED YOUR CLAIM FOR REIMBURSEMENT FOR YOUR WIFE'S TRAVEL FROM
ALCONBURY, ENGLAND, TO IZMIR, TURKEY, DURING THE PERIOD DECEMBER 19,
1963, TO JANUARY 10, 1964.
BY ORDERS DATED MARCH 11, 1963, AS AMENDED, YOU WERE ORDERED TO
EXTENDED ACTIVE DUTY FOR A PERIOD OF 24 MONTHS UNLESS SOONER RELIEVED,
AND ASSIGNED TO 10TH TACTICAL HOSPITAL, USAFE, APO 238, NEW YORK, NEW
YORK, WITH 21 DAYS' TEMPORARY DUTY EN ROUTE AT GUNTER AIR FORCE BASE,
ALABAMA.
TRANSPORTATION OF YOUR DEPENDENT WIFE TO THE OVERSEAS STATION AT
GOVERNMENT EXPENSE WAS NOT AUTHORIZED DUE TO INSUFFICIENT SERVICE
RETAINABILITY. HOWEVER, YOUR WIFE TRAVELED TO YOUR OVERSEAS DUTY
STATION AT PERSONAL EXPENSE. BY ORDERS DATED DECEMBER 19, 1963, YOU
WERE REASSIGNED TO DUTY AT APO 224, NEW YORK, NEW YORK. THE ORDERS
STATED THAT YOU WERE SERVING ON AN UNACCOMPANIED TOUR AND THAT YOUR
DEPENDENT WAS IN THAT THEATER OF OPERATIONS IN A TOURIST STATUS ONLY,
AND THEREFORE THAT THERE WAS NO ENTITLEMENT TO DISLOCATION ALLOWANCE OR
TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE. BY ORDERS DATED
SEPTEMBER 21, 1964, THESE ORDERS WERE AMENDED TO AUTHORIZE DISLOCATION
ALLOWANCE. SUBSEQUENTLY, BY SETTLEMENT DATED JANUARY 18, 1965, OUR
CLAIMS DIVISION ALLOWED YOUR CLAIM FOR DISLOCATION ALLOWANCE INCIDENT TO
YOUR PERMANENT CHANGE OF STATION FROM APO 238, NEW YORK, NEW YORK, TO
APO 224, NEW YORK, NEW YORK. YOUR CLAIM FOR DEPENDENT TRAVEL INCIDENT
TO THAT REASSIGNMENT WAS DISALLOWED BY SETTLEMENT DATED SEPTEMBER 10,
1965, FOR THE REASONS STATED THEREIN.
IN YOUR PRESENT LETTER YOU SAY THAT ACCORDING TO USAFE REGULATIONS
YOU HAD ACQUIRED THE STATUS OF A MEMBER ACCOMPANIED BY DEPENDENTS WHEN
YOU WERE TRANSFERRED TO APO 224, NEW YORK, NEW YORK, AND THAT WE
RECOGNIZED THIS WHEN WE ALLOWED YOUR CLAIM FOR DISLOCATION ALLOWANCE.
THEREFORE, YOU BELIEVE THAT YOU ARE ALSO ENTITLED TO REIMBURSEMENT FOR
YOUR DEPENDENT'S TRAVEL FROM ALCONBURY, ENGLAND, TO IZMIR, TURKEY.
THE STATUTORY AUTHORITY FOR TRANSPORTATION OF DEPENDENTS OF MEMBERS
OF THE UNIFORMED SERVICES, 37 U.S.C. 406, EXPRESSLY PROVIDES THAT
TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE UPON A MEMBER'S
ORDERED CHANGE OF PERMANENT STATION SHALL BE SUBJECT TO SUCH CONDITIONS
AND LIMITATIONS, FOR SUCH GRADES, RANKS, AND RATINGS, AND TO AND FROM
SUCH PLACES AS THE SECRETARIES CONCERNED MAY PRESCRIBE. THE RIGHT TO
DEPENDENTS' TRAVEL IS NOT AN ABSOLUTE ONE BUT MAY BE ADMINISTRATIVELY
SUSPENDED OR DENIED FOR REASONS OF MILITARY NECESSITY OR EXPEDIENCE.
CULP V. UNITED STATES, 76 CT.CL. 507; 35 COMP. GEN. 61. REGULATIONS IN
THE MATTER, ISSUED BY THE SECRETARIES CONCERNED, ARE CONTAINED IN
CHAPTER 7 OF THE JOINT TRAVEL REGULATIONS. IMPLEMENTING REGULATIONS FOR
THE DEPARTMENT OF THE AIR FORCE DURING THE PERIOD IN QUESTION, PARAGRAPH
16, CHAPTER 2, AIR FORCE MANUAL 35-11 AD, EFFECTIVE OCTOBER 1, 1963,
PRESCRIBE THE FOREIGN SERVICE TOURS FOR MEMBERS WHOSE DEPENDENTS
ACCOMPANY THEM TO THE FOREIGN SERVICE STATION, OR JOIN THEM IN THE
OVERSEAS AREA AT ANY TIME IN ANY STATUS, EXCEPT PERSONS WHOSE DEPENDENTS
VISIT THEM IN A "TOURIST STATUS.' THE REGULATIONS, IN GENERAL, PROVIDE
THAT A MEMBER WHOSE DEPENDENTS JOINED HIM IN A TOURIST STATUS AND WHO IS
SERVING IN AN "ALL OTHERS" TOUR, AND WHO AGREES TO EXTEND HIS OVERSEAS
TOUR OF SERVICE TO COMPLETE THE TOUR PRESCRIBED FOR MEMBERS WITH
DEPENDENTS MAY CHANGE HIS "ALL OTHERS" TOUR TO A ,WITH DEPENDENTS" TOUR
TO ACQUIRE DEPENDENTS' OVERSEAS TRAVEL RIGHTS. IT WILL BE NOTED THAT
SUCH A LIMITATION WAS EXPRESSLY INCLUDED IN THE JOINT TRAVEL REGULATIONS
IN PARAGRAPH M7000-15, CHANGE 136, DATED APRIL 1, 1964.
THE OVERSEAS DUTY TOURS FOR MILITARY PERSONNEL (OTHER THAN ATTACHE
SYSTEMS) SET FORTH IN THE REGULATION SHOWS THE TOUR PRESCRIBED FOR
ENGLAND AND TURKEY AS FOLLOWS:
CHART
TOURS IN MONTHS COUNTRY OR AREA
ACCOMPANIED BY DEPENDENTS ALL OTHERS
TURKEY
ANKARA, ISTANBUL
AND IZMIR 30 18
UNITED KINGDOM (EXCEPT
LONDONDERRY, IRELAND) 36 24
SINCE YOUR TOUR OF DUTY WAS LIMITED TO 24 MONTHS AND SINCE THE RECORD
SHOWS YOU DECLINED TO EXTEND YOUR TOUR OF DUTY OVERSEAS IN ORDER TO BE
ELIGIBLE FOR TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE UPON
PERMANENT CHANGE OF STATION AS A MEMBER SERVING ON A "WITH DEPENDENTS"
TOUR, TRANSPORTATION OF YOUR WIFE FROM ALCONBURY, ENGLAND, TO IZMIR,
TURKEY, WHICH HAD A 30-MONTH PRESCRIBED TOUR OF DUTY, WAS NOT THE
FINANCIAL RESPONSIBILITY OF THE GOVERNMENT.
WITH RESPECT TO YOUR CONTENTION THAT UNDER THE USAFE REGULATIONS A
MEMBER AUTOMATICALLY BECOMES ACCOMPANIED UNDER THE CIRCUMSTANCES OF
HAVING DEPENDENTS THERE LONGER THAN 120 DAYS AND CAN BE INVOLUNTARILY
EXTENDED TO THE ACCOMPANIED TOUR, AS PREVIOUSLY EXPLAINED TO YOU BY THE
COMMANDER IN CHIEF, HEADQUARTERS, UNITED STATES AIR FORCES IN EUROPE, IN
LETTER DATED AUGUST 3, 1964, SUPPLEMENTARY REGULATIONS ISSUED BY THE
EUROPEAN THEATER COMMANDER PROVIDE THAT DEPENDENTS MAY BE CONSIDERED
ACCOMPANIED AFTER 120 DAYS IN THE THEATER IN ORDER TO PERMIT THEM TO
OBTAIN POST EXCHANGE AND COMMISSARY PRIVILEGES, BUT SPECIFICALLY STATE
THAT TRAVEL OF DEPENDENTS WILL BE AT THEIR OWN EXPENSE. FURTHERMORE, IN
OUR SETTLEMENT OF JANUARY 18, 1965, THE SUM OF $130.05 AS DISLOCATION
ALLOWANCE INCIDENT TO YOUR TRANSFER TO APO 224, NEW YORK, NEW YORK, WAS
ALLOWED ON THE
BASIS THAT YOU RELOCATED YOUR HOUSEHOLD IN CONNECTION WITH A
PERMANENT CHANGE OF STATION. PARAGRAPH M9002 OF THE JOINT TRAVEL
REGULATIONS PROVIDES THAT EXCEPT AS PROVIDED IN PARAGRAPH M9003 (WHICH
IS NOT APPLICABLE HERE) THE DISLOCATION ALLOWANCE IS PAYABLE TO A MEMBER
WHENEVER DEPENDENTS RELOCATE THEIR HOUSEHOLD IN CONNECTION WITH A
PERMANENT CHANGE OF STATION. IT PROVIDES FURTHER, THAT "ACTUAL
TRANSPORTATION OF DEPENDENTS AT GOVERNMENT EXPENSE IS NOT A PREREQUISITE
TO ENTITLEMENT TO THE DISLOCATION ALLOWANCE.' THUS, IRRESPECTIVE OF
WHETHER A MEMBER IS ENTITLED TO TRANSPORTATION OF HIS DEPENDENTS AT
GOVERNMENT EXPENSE, THE REGULATIONS AUTHORIZE PAYMENT OF DISLOCATION
ALLOWANCE WHERE A MEMBER RELOCATES HIS HOUSEHOLD IN CONNECTION WITH HIS
PERMANENT CHANGE OF STATION AND HIS DEPENDENTS ARE WITH HIM AT HIS NEW
PERMANENT STATION.
SINCE THE RECORD SHOWS THAT YOUR DEPENDENT WIFE DID NOT HAVE THE
STATUS OF AN ACCOMPANYING DEPENDENT WITHIN THE MEANING OF THE APPLICABLE
REGULATIONS WHEN YOU WERE ORDERED TO APO 224 NEW YORK, NEW YORK, YOU
WERE NOT ENTITLED TO HER TRANSPORTATION THERE AT GOVERNMENT EXPENSE.
ACCORDINGLY, THERE IS NO LEGAL BASIS TO ALLOW YOUR CLAIM FOR YOUR
DEPENDENT'S TRANSPORTATION FROM ALCONBURY, ENGLAND, TO IZMIR, TURKEY.
THE SETTLEMENT OF SEPTEMBER 10, 1965, WAS CORRECT AND IS SUSTAINED.
B-157955, DEC. 10, 1965
TO THE SECRETARY OF THE NAVY:
REFERENCE IS MADE TO LETTER OF OCTOBER 20, 1965, FROM THE UNDER
SECRETARY OF THE NAVY REQUESTING DECISION WHETHER PARAGRAPH M6005 OF THE
JOINT TRAVEL REGULATIONS WHICH BECAME EFFECTIVE AUGUST 31, 1965, MAY BE
AMENDED RETROACTIVELY TO CHANGE THE EFFECTIVE DATE TO MAY 27, 1965,
UNDER THE CIRCUMSTANCES DESCRIBED. THE REQUEST WAS ASSIGNED CONTROL NO.
65-32 BY THE DEPARTMENT OF DEFENSE PER DIEM, TRAVEL AND TRANSPORTATION
ALLOWANCE COMMITTEE.
IN THE LETTER IT IS STATED THAT PUBLIC LAW 89-51, APPROVED JUNE 28,
1965, 79 STAT. 173, WITH EFFECTIVE DATE OF OCTOBER 13, 1964, AMENDED THE
RESERVE OFFICERS' TRAINING CORPS VITALIZATION ACT OF 1964, PUB.L.
88-647, APPROVED OCTOBER 13, 1964, 78 STAT. 1063, TO PROVIDE AUTHORITY
FOR PAYMENT OF TRAVEL AND TRANSPORTATION ALLOWANCES TO SELECTED
APPLICANTS FOR MEMBERSHIP IN THE SENIOR RESERVE OFFICERS' TRAINING CORPS
FOR ORDERED TRAVEL TO AND FROM SUMMER TRAINING DUTY. IT IS FURTHER
STATED THAT THE LEGISLATIVE HISTORY OF THE BILL, H.R. 7762, 89TH
CONGRESS, WHICH WAS ENACTED AS PUBLIC LAW 89-51 INDICATES THAT THIS
AUTHORITY WAS INADVERTENTLY OMITTED FROM PUBLIC LAW 88-647, AND THAT IS
IS ALSO INDICATED THAT PUBLIC LAW 89-51 WAS MADE RETROACTIVELY EFFECTIVE
TO INSURE THAT APPLICANTS FOR MEMBERSHIP IN THE SENIOR RESERVE OFFICERS'
TRAINING CORPS WOULD BE ENTITLED TO ALLOWANCES FOR TRAINING IN THE
SUMMER OF 1965.
ALSO IT IS SAID THAT THE TRAVEL AND TRANSPORTATION ENTITLEMENT
PROVISIONS OF PUBLIC LAW 88-647 WERE IMPLEMENTED IN PARAGRAPH M6005 OF
THE JOINT TRAVEL REGULATIONS, EFFECTIVE MAY 27, 1965, BY JOINT
DETERMINATION NO. 30-65 OF THAT DATE AND THAT BY JOINT DETERMINATION NO.
53-65 DATED AUGUST 31, 1965, PARAGRAPH M6005 OF THE REGULATIONS WAS
AMENDED TO IMPLEMENT THE PROVISIONS OF PUBLIC LAW 89-51. IT IS STATED
THAT IN THE ADMINISTRATIVE PROCESSING OF JOINT DETERMINATION NO. 53-65,
THE INTENDED EFFECTIVE DATE MAY 27, 1965, WAS INADVERTENTLY DELETED WITH
THE RESULT THAT THE AMENDMENT OF PARAGRAPH M6005 BECAME EFFECTIVE ON
AUGUST 31, 1965, RATHER THAN ON MAY 27, 1965, AS INTENDED. THIS IS
REFLECTED IN CHANGE NO. 154 OF THE JOINT TRAVEL REGULATIONS.
IN HIS LETTER THE UNDER SECRETARY SAYS THAT IN OUR DECISION B-68708,
AUGUST 20, 1947, IT IS INDICATED THAT REGULATIONS ISSUED PURSUANT TO
EXPRESS STATUTORY AUTHORITY AND AMENDMENTS THERETO MAY BE MADE
RETROACTIVELY EFFECTIVE TO THE EFFECTIVE DATE OF THE STATUTE UNDER WHICH
THEY ARE ISSUED. FURTHER, HE SAYS THAT IT IS IMPLIED IN OUR DECISION 32
COMP. GEN. 315, 316, THAT A RETROACTIVE AMENDMENT TO A REGULATION MAY
BE ISSUED TO CORRECT AN OBVIOUS ADMINISTRATIVE ERROR AND THEREFORE, IT
WOULD APPEAR TO BE PROPER TO AMEND PARAGRAPH M6005 OF THE REGULATIONS SO
AS TO BE EFFECTIVE ON MAY 27, 1965.
SECTION 2109 OF TITLE 10, U.S. CODE WAS ADDED BY PUBLIC LAW 88-647,
DATED OCTOBER 13, 1964, AND PROVIDES FOR FIELD TRAINING AND PRACTICE
CRUISES FOR MEMBERS OF THE SENIOR RESERVE OFFICERS' TRAINING CORPS.
SUBSECTION (B) (1) PROVIDES THAT THE SECRETARY OF THE MILITARY
DEPARTMENT CONCERNED MAY---
"/1) TRANSPORT MEMBERS OF THE PROGRAM TO AND FROM THE PLACES
DESIGNATED FOR FIELD TRAINING OR PRACTICE CRUISES AND FURNISH THEM
SUBSISTENCE WHILE TRAVELING TO AND FROM THOSE PLACES, OR, INSTEAD OF
FURNISHING THEM TRANSPORTATION AND SUBSISTENCE, PAY THEM A TRAVEL
ALLOWANCE AT THE RATE PRESCRIBED FOR CADETS AND MIDSHIPMEN AT THE UNITED
STATES MILITARY, NAVAL, AND AIR FORCE ACADEMIES FOR TRAVEL BY THE
SHORTEST USUALLY TRAVELED ROUTE FROM THE PLACES FROM WHICH THEY ARE
AUTHORIZED TO PROCEED TO THE PLACE DESIGNATED FOR THE TRAINING OR CRUISE
AND RETURN, AND PAY THE ALLOWANCE FOR THE RETURN TRIP IN ADVANCE; "
SECTION 2 OF PUBLIC LAW 89-51 AMENDED 10 U.S.C. 2109 (B) BY INSERTING
THE WORDS,"AND DESIGNATED APPLICANTS FOR MEMBERSHIP," AFTER THE WORDS
"MEMBERS OF" WHEREVER THEY APPEAR. SECTION 4 OF THE STATUTE PROVIDES
"THE EFFECTIVE DATE OF THIS ACT IS OCTOBER 13, 1964.'
THE PURPOSE OF THE ABOVE-QUOTED PROVISIONS OF LAW IS STATED IN SENATE
REPORT 315 ON H.R. 7762, 89TH CONG., 1ST SESS. AT PAGE 2 AS FOLLOWS:
"ANOTHER PURPOSE OF THE ROTC LEGISLATION ENACTED LAST YEAR WAS TO
AUTHORIZE A 2-YEAR SENIOR ROTC PROGRAM THAT WAS INTENDED TO ATTRACT
TRANSFER STUDENTS FROM JUNIOR COLLEGES WITHOUT ROTC UNITS AND STUDENTS
AT 4-YEAR COLLEGES WHO HAVE NOT HAD THE BASIC COURSE OF THE SENIOR ROTC
PROGRAM. BEFORE A STUDENT CAN BE ACCEPTED IN THE NEW 2-YEAR SENIOR ROTC
PROGRAM, HE MUST SUCCESSFULLY COMPLETE A 6- TO 8-WEEK PERIOD OF SUMMER
MILITARY TRAINING. THE 1964 ACT AUTHORIZED PAY FOR APPLICANTS FOR THE
2-YEAR ROTC BUT IT DID NOT INCLUDE A PROVISION AUTHORIZING TRAVEL
ALLOWANCES TO AND FROM THE SUMMER MILITARY TRAINING. THIS OMISSION WAS
UNINTENDED AND H.R. 7762 WOULD PROVIDE AUTHORITY FOR PAYMENT OF THESE
NECESSARY TRAVEL ALLOWANCES.'
FURTHER, THE REPORT SHOWS THAT THE LEGISLATION (PUB.L. 89-51) WAS
SPONSORED BY THE DEPARTMENT OF DEFENSE TO GIVE THE SECRETARY OF THE
MILITARY DEPARTMENT CONCERNED AUTHORITY TO ISSUE REGULATIONS AUTHORIZING
TRAVEL ALLOWANCES FOR DESIGNATED APPLICANTS FOR MEMBERSHIP IN THE ROTC
PROGRAM FOR THE REASON THAT IT WOULD BE DIFFICULT, IF NOT IMPOSSIBLE TO
CONDUCT THE CAMPS AND CRUISES WITHOUT THE TRAVEL AUTHORIZATION, AND THAT
SUCH REGULATIONS COULD BE MADE RETROACTIVE TO OCTOBER 13, 1964.
IT IS A WELL ESTABLISHED RULE THAT WHEN REGULATIONS ARE PROPERLY
ISSUED RIGHTS THEREUNDER BECOME FIXED AND, ALTHOUGH SUCH REGULATIONS MAY
BE AMENDED PROSPECTIVELY TO INCREASE OR DECREASE RIGHTS GIVEN THEREBY,
THEY MAY NOT BE SO AMENDED RETROACTIVELY EXCEPT TO CORRECT OBVIOUS
ERRORS IN
THE REGULATIONS WHICH IT IS INTENDED TO CORRECT. 27 COMP. GEN. 339;
32 ID. 315 AND 527; 33 ID. 174 AND 505; 40 ID. 242 AND 41 ID. 392.
COMPARE ARIZONA GROCERY V. ATCHISON RY., 284 U.S. 370 (1932);
HELVERING V. GRIFFITHS, 318 U.S. 371, 395 (1943); 23 COMP. GEN. 713,
716, AND 24 ID. 439, 441.
CLEARLY, CHANGE 154 TO PARAGRAPH M6005, JOINT TRAVEL REGULATIONS, WAS
PROMULGATED FOR THE EXPRESS PURPOSE OF AUTHORIZING TRAVEL ALLOWANCES FOR
APPLICANTS FOR MEMBERSHIP IN THE ROTC PROGRAM WHILE TRAVELING TO AND
FROM THE PLACES FOR TRAINING OR PRACTICE CRUISES. ALSO, THE RECORD
SHOWS THAT IT WAS BOTH THE LEGISLATIVE AND ADMINISTRATIVE INTENT THAT
SUCH APPLICANTS WOULD BE ENTITLED TO THESE ALLOWANCES INCIDENT TO
TRAINING PERFORMED IN THE SUMMER OF 1965. THE REGULATION AS WRITTEN WAS
INEFFECTIVE TO AUTHORIZE TRAVEL ALLOWANCES FOR SUCH APPLICANTS FOR
TRAINING IN THE SUMMER OF 1965 FOR THE STATED REASON THAT THE INTENDED
EFFECTIVE DATE, MAY 27, 1965, WAS INADVERTENTLY OMITTED. THUS IT IS
EVIDENT THAT PARAGRAPH M6005 OF THE REGULATIONS AS WRITTEN DOES NOT
REFLECT THE INTENT OF THE ISSUING AUTHORITY AND THAT THE WORDS
"EFFECTIVE DATE MAY 27, 1965" WERE INTENDED FOR INCLUSION IN THE
REGULATION BUT WERE OMITTED THROUGH ERROR OR INADVERTENCE.
BASED ON THE FOREGOING IT APPEARS THAT A MODIFICATION TO PARAGRAPH
M6005 OF THE REGULATIONS MAKING IT EFFECTIVE MAY 27, 1965, MAY BE
CONSIDERED A BONA FIDE CORRECTION TO SHOW ORIGINAL INTENT, COMING WITHIN
THE RULE PERMITTING RETROACTIVE MODIFICATION, AND WOULD BE PROPER. SEE
OUR DECISION OF AUGUST 12, 1964, TO THE SECRETARY OF THE ARMY, B-154781,
COPY HEREWITH.
B-156652, DEC. 9, 1965
TO LANCASTER ASSOCIATES:
FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD MADE TO
GENERAL TRAILERS, INCORPORATED, UNDER INVITATION FOR BIDS NO. 53-007,
ISSUED BY THE OAK RIDGE INSTITUTE OF NUCLEAR STUDIES.
UNITED STATES ATOMIC ENERGY COMMISSION REPORTS THAT THE OAK RIDGE
INSTITUTE OF NUCLEAR STUDIES, A NOT-FOR-PROFIT EDUCATIONAL CORPORATION,
IS ENGAGED BY THE COMMISSION UNDER COST-TYPE CONTRACT NO.
AT-/40-1/-GEN-33 TO MANAGE, OPERATE AND MAINTAIN CERTAIN RESEARCH,
TRAINING, HOSPITAL AND EDUCATIONAL FACILITIES OWNED BY THE GOVERNMENT AT
OAK RIDGE, TENNESSEE, AND ELSEWHERE. THE CONTRACT AUTHORIZED THE
INSTITUTE TO PROCURE SUCH MATERIALS, SUPPLIES AND EQUIPMENT AS ARE
NECESSARY TO THE PERFORMANCE OF THE CONTRACT WORK AND PROVIDES THAT THE
INSTITUTE SHALL USE PROCUREMENT METHODS, PRACTICES AND PROCEDURES THAT
ARE ACCEPTABLE TO THE COMMISSION. THE PROVISIONS OF THE FEDERAL
PROCUREMENT REGULATIONS AND AEC PROCUREMENT REGULATIONS ARE NOT BINDING
ON THE COMMISSION (AS EXPRESSED IN AECPR 9-1.5202 AND 9-1.5203) TO MAKE
THE FPR AND AECPR AVAILABLE TO COST-TYPE CONTRACTORS SUCH AS THE
INSTITUTE FOR CONSIDERATION IN THE DEVELOPMENT OF THEIR OWN WRITTEN
PROCUREMENT PRACTICES AND PROCEDURES. AECPR 9-1.5202 (A) REQUIRES THAT
THE COMMISSION'S CONTRACTING OFFICER, BEFORE APPROVING SUCH PRACTICES
AND PROCEDURES, SHALL DETERMINE THAT THEY ARE CONSISTENT WITH THE BASIC
AEC PROCUREMENT POLICIES SET FORTH IN AECPR 9-1.5203 AND THAT THEY ARE
ADEQUATE TO ACHIEVE THE POLICY OBJECTIVES THERE STATED. THE WRITTEN
PROCUREMENT PRACTICES AND PROCEDURES THAT WERE USED BY THE INSTITUTE FOR
THE PROCUREMENT ACTION UNDER CONSIDERATION MEET THE ABOVE-STATED
REQUIREMENTS AND HAVE BEEN APPROVED BY THE CONTRACTING OFFICER.
AS A PART OF THE WORK PERFORMED FOR THE COMMISSION UNDER THE
CONTRACT, THE INSTITUTE CONDUCTS A PROGRAM OF TRAINING THROUGHOUT THE
UNITED STATES IN THE APPLICATION AND HANDLING OF RADIOISOTOPES; AND
SPECIALLY-EQUIPPED MOBILE TRAILERS ARE USED (GENERALLY ON COLLEGE
CAMPUSES) AS LABORATORIES AND CLASSROOMS FOR SUCH TRAINING. THE
PROCUREMENT ACTION IN QUESTION INVOLVED THE PURCHASE OF SUCH A TRAILER.
ON NOVEMBER 30, 1954, THE INSTITUTE SENT LETTER NOTICES TO
APPROXIMATELY 20 POTENTIAL SUPPLIERS ADVISING OF THE CONTEMPLATED
ADVERTISEMENT FOR BIDS FOR THE TRAILER AND ASKING THAT FIRMS INTERESTED
IN BIDDING ON THE REQUIREMENT COMPLETE AND RETURN TO THE INSTITUTE A
FORM REQUESTING THAT THEY BE PLACED ON THE BIDDERS' LIST TO RECEIVE THE
INVITATION. ON DECEMBER 21, 1964, THE INSTITUTE ISSUED INVITATION NO.
53-007 TO NINE POTENTIAL SUPPLIERS. THE INVITATION WAS ISSUED UNDER
PROCUREMENT PROCEDURES THAT ARE SIMILAR TO THE GOVERNMENT'S FORMAL
ADVERTISING PROCEDURES AND CALLED FOR THE SUBMISSION OF SEALED BIDS TO
BE RECEIVED BY THE INSTITUTE UNTIL 2 P.M. ON FEBRUARY 8, 1965.
THE THREE BIDS RECEIVED AND PUBLICLY OPENED AT THE APPOINTED TIME
WERE AS FOLLOWS:
CHART
GENERAL TRAILERS, INC. $46,686.20
LANCASTER ASSOCIATES $49,740.00
THE GERSTENSLAGER COMPANY $59,967.69
THEREAFTER YOU ATTEMPTED TO CONVINCE THE INSTITUTE'S PROCUREMENT
PERSONNEL THAT THE LOW BIDDER, GENERAL TRAILERS, WAS NOT QUALIFIED TO
PERFORM THE WORK AND SUBMITTED BY LETTERS, IN PERSON, AND BY TELEPHONE
VARIOUS DOCUMENTS AND ARGUMENTS IN SUPPORT OF YOUR CONTENTION.
BASICALLY YOU CONTEND THAT GENERAL TRAILERS WERE NOT QUALIFIED BY
EXPERIENCE TO BUILD THE SPECIAL TYPE OF TRAILER INVOLVED.
IN THE MEANTIME, THE INSTITUTE ITSELF UNDERTOOK TO OBTAIN FACTUAL
INFORMATION UPON WHICH TO MAKE A DETERMINATION AS TO THE ABILITY OF
GENERAL TRAILERS TO PERFORM THE REQUIRED WORK. FOR THIS PURPOSE A
THREE-MEMBER TEAM WAS SENT TO CONDUCT A PRE-AWARD SURVEY OF GENERAL
TRAILERS' FACILITIES. BASED UPON THEIR REPORT, DISCUSSIONS WITH THEM,
AND OTHER EVIDENCE OBTAINED, IT WAS DETERMINED THAT GENERAL TRAILERS WAS
CAPABLE OF PERFORMING THE WORK. THE PROPOSED AWARD TO GENERAL TRAILERS
WAS THEN FORWARDED TO THE COMMISSION FOR APPROVAL. HOWEVER, THE
COMMISSION HAD RECEIVED COPIES OF YOUR LETTERS AND IN VIEW OF THE
CONTENTIONS MADE THEREIN THE PURCHASE ORDER WAS RETURNED TO THE
INSTITUTE WITH THE REQUEST THAT THE INSTITUTE REVIEW IN A SYSTEMATIC WAY
ALL OF THE INFORMATION NOW IN YOUR HANDS, INCLUDING ANY INFORMATION IN
THE LETTERS OF PROTEST, AND DETERMINE WHETHER IN THE JUDGMENT OF
RESPONSIBLE OFFICIALS OF YOUR ORGANIZATION THE LOW BIDDER IS OR IS NOT
CONSIDERED CAPABLE OF SATISFACTORILY PERFORMING THE WORK CALLED FOR.'
SUBSEQUENTLY THE INSTITUTE RETURNED THE PURCHASE ORDER TO THE COMMISSION
STATING THAT THEY HAD REVIEWED ALL THE INFORMATION WHICH THEY HAD AND
THAT IT WAS THEIR DETERMINATION THAT GENERAL TRAILERS HAS THE ,NECESSARY
CAPACITY, ABILITY AND CREDIT TO PERFORM THIS SUBCONTRACT.'
BASED ON SUCH FINDING THE COMMISSION APPROVED AND RETURNED THE ORDER
TO THE INSTITUTE. THE AWARD WAS MADE TO GENERAL TRAILERS ON APRIL 7,
1965. THE COMMISSION FURTHER REPORTS THAT, IN THEIR OPINION, THE
FACTUAL INFORMATION OBTAINED BY THE INSTITUTE RELATIVE TO GENERAL
TRAILERS' TECHNICAL AND FINANCIAL COMPETENCE FULLY SUPPORTS THE
INSTITUTE'S DETERMINATION THAT GENERAL TRAILERS HAS THE NECESSARY
ABILITY, CAPACITY AND CREDIT TO PERFORM THE WORK.
THIS OFFICE, AS WELL AS THE COURTS, HAS CONSISTENTLY HELD THAT THE
QUESTION AS TO A BIDDER'S RESPONSIBILITY IS PRIMARILY FOR DETERMINATION
BY THE CONTRACTING AGENCY. SEE 33 COMP. GEN. 539 AND 38 ID. 131. THE
RECORD SHOWS THAT THE NECESSARY DETERMINATION AS TO THE RESPONSIBILITY
OF GENERAL TRAILERS WAS MADE BY THE INSTITUTE AND APPROVED BY THE
COMMISSION. IN THE ABSENCE OF A SHOWING THAT THE ACTION TAKEN WAS
CAPRICIOUS OR ARBITRARY, WE ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE
DETERMINATION THAT THE SUCCESSFUL BIDDER HAD THE NECESSARY TECHNICAL
ABILITY, CAPACITY AND CREDIT TO PERFORM THE WORK. NO SHOWING HAS BEEN
MADE THAT THE DETERMINATIONS MADE WERE ARBITRARY OR CAPRICIOUS.
ACCORDINGLY, THERE IS NO BASIS UPON WHICH WE WOULD BE WARRANTED IN
QUESTIONING THE AWARD MADE TO THE LOW BIDDER, GENERAL TRAILERS, AND
THEREFORE YOUR PROTEST MUST BE DENIED.
B-157817, DEC. 9, 1965
TO MICROWAVE PRODUCTS, INC. :
WE AGAIN REFER TO YOUR LETTER OF OCTOBER 5, 1965, CONCERNING
INVITATION FOR BIDS NO. 126-126-66 ISSUED BY THE U.S. NAVY ELECTRONICS
SUPPLY OFFICE, GREAT LAKES, ILLINOIS, IN WHICH YOU STATE THAT YOU WERE
NOT GIVEN SUFFICIENT OPPORTUNITY TO SUBMIT A BID.
THE INVITATION WAS ISSUED ON SEPTEMBER 14, 1965, WITH AN OPENING DATE
OF OCTOBER 5, 1965. ALTHOUGH THE INVITATION CONTAINED CLASSIFIED
INFORMATION AND SYNOPSIZING WAS NOT REQUIRED, THE INVITATION WAS
SYNOPSIZED IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION
1-1003, WHICH IN 1-1003.2 PROVIDES FOR THE SYNOPSIS TO BE PREPARED AT
LEAST 10 DAYS PRIOR TO THE ISSUE DATE IN ORDER TO ALLOW THOSE CONCERNS
NOT ON THE CURRENT BIDDERS LIST AN OPPORTUNITY TO SUBMIT A BID. COPIES
OF THE IFB WERE SENT TO SIX MANUFACTURERS, BUT MICROWAVE WAS NOT
INCLUDED SINCE IT IS NOT ON THE BIDDERS MAILING LIST FOR THE SPECIFIC
ITEM BEING PROCURED. AS A RESULT OF THE SYNOPSIZING, 15 ADDITIONAL
REQUESTS FOR INVITATIONS WERE HONORED; HOWEVER, THE REQUEST OF
MICROWAVE WAS NOT RECEIVED AT THE ELECTRONICS SUPPLY OFFICE UNTIL
SEPTEMBER 24, 1965. ALTHOUGH THE SYNOPSIS GAVE NO INDICATION, A
SECURITY CLEARANCE WAS NECESSARY BEFORE THE IFB COULD BE SENT TO
MICROWAVE. THAT WAS ACCOMPLISHED ON SEPTEMBER 28, 1965, AND COPIES OF
THE IFB WERE SENT TO THE ELECTRONICS SUPPLY OFFICE MAILROOM ON SEPTEMBER
29, 1965, FOR FORWARDING. THE IFB WAS SENT TO MICROWAVE, IN CALIFORNIA,
BY REGULAR MAIL AND APPARENTLY ARRIVED THERE ON OCTOBER 5, 1965. SINCE
THE BIDS HAD BEEN OPENED WHEN MICROWAVE REQUESTED AN EXTENSION OF TIME
IN WHICH TO SUBMIT A BID, THE REQUEST WAS DENIED.
ARMED SERVICES PROCUREMENT REGULATION 2-202.1 PROVIDES IN PART:
"* * * AS A GENERAL RULE, BIDDING TIME SHALL BE NOT LESS THAN 15
CALENDAR DAYS WHEN PROCURING STANDARD COMMERCIAL ARTICLES AND SERVICES
AND NOT LESS THAN 30 CALENDAR DAYS WHEN PROCURING OTHER THAN STANDARD
COMMERCIAL ARTICLES OR SERVICES. THIS RULE NEED NOT BE OBSERVED IN
SPECIAL CIRCUMSTANCES, OR WHERE THE URGENCY FOR THE SUPPLIES OR SERVICES
DOES NOT PERMIT SUCH DELAY * *
"
THE FILE INDICATES THAT THE PROCUREMENT WAS OF AN URGENT NATURE,
WHICH NECESSITATED THE 21 DAY BIDDING PERIOD, AND WE FIND NO BASIS FOR
OBJECTING TO THIS DETERMINATION.
THERE ARE TWO PERIODS OF TIME INVOLVED HERE IN WHICH THERE APPEARS TO
HAVE BEEN SOME DELAY. THE FIRST PERIOD IS DURING THE TIME IN WHICH YOU
REQUESTED AN INVITATION--- A PERIOD OF 10 DAYS AFTER THE BIDS WERE
ISSUED, AND PRESUMABLY THE SYNOPSIS PUBLISHED. THE SECOND PERIOD IS
THAT AFTER THE SECURITY CLEARANCE WAS APPROVED AND THE BIDS SENT TO THE
ELECTRONICS SUPPLY OFFICE MAILROOM TO BE FORWARDED TO YOU AND THE DATE
RECEIVED BY YOU--- A PERIOD OF 6 DAYS. THE ELECTRONICS SUPPLY OFFICE
ACKNOWLEDGES THAT IT SHOULD HAVE SENT MICROWAVE THE INVITATION BY AIR
MAIL AND WILL CORRECT THE PROCEDURE IN THE FUTURE; HOWEVER, SINCE YOUR
REQUEST TOOK 10 DAYS TO ARRIVE, WHICH, OF COURSE, IS FOUR DAYS LONGER
THAN ESO TOOK TO TRANSMIT THE BID TO YOU, IT APPEARS THAT MICROWAVE WAS
MORE UNMINDFUL OF THE TIME WHEN THE ESO, AND, THUS, THE BLAME CANNOT BE
PLACED SOLELY ON THAT AGENCY. HAD MICROWAVE PROMPTLY FORWARDED ITS
REQUEST BY AIR MAIL, IT APPARENTLY WOULD HAVE RECEIVED AN INVITATION IN
SUFFICIENT TIME TO RETURN A BID BY AIR MAIL, REGARDLESS OF THE ACTIONS
OF THE ELECTRONICS SUPPLY OFFICE. THEREFORE, WE FEEL THAT YOU HAVE NOT
SUBSTANTIATED YOUR PROTEST.
FURTHERMORE, EVEN IF THE ELECTRONIC SUPPLY OFFICE WAS SOLELY TO BLAME
FOR THE DELAY SINCE THE BIDS HAVE BEEN OPENED AND THE LOW BID DISCLOSED
AND THE PROCUREMENT IS OF AN URGENT NATURE, WE SEE NO LEGAL BASIS FOR
CANCELLATION OF THE BIDS AND READVERTISEMENT OF THE PROCUREMENT. SEE IN
THIS CONNECTION B-154657, DATED AUGUST 25, 1965.
B-157507, DEC. 8, 1965
TO MR. PETER K. BABALAS:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 25, 1965, YOUR FILE
65-1232, ON BEHALF OF METAL STRUCTURES, INC., REQUESTING RECONSIDERATION
OF THE SITUATION COVERED IN OUR DECISION B-157507 OF SEPTEMBER 28, 1965.
WE HAVE DEVELOPED THE MATTER FURTHER WITH THE NATIONAL AERONAUTICS
AND SPACE ADMINISTRATION (NASA), WHICH AGENCY IS PRIMARILY RESPONSIBLE
FOR DRAFTING SPECIFICATIONS REFLECTING ITS NEEDS AND FOR DECIDING
WHETHER CONTRACTORS' OFFERS MEET THOSE NEEDS. SEE THE LAST PARAGRAPH OF
OUR SEPTEMBER 28 DECISION.
NASA HAS POINTED OUT THAT UNDER THE CONTRACT WITH EASTERN
CONSTRUCTION CORPORATION, THE CONTRACTOR WAS REQUIRED TO SUBMIT FOR
APPROVAL DRAWINGS AND DATA REGARDING PANELS TO BE EMPLOYED IN THE
BUILDING TO BE CONSTRUCTED AND IN ACCORDANCE WITH THIS REQUIREMENT THE
CONTRACTOR SUBMITTED MATERIAL FROM METAL STRUCTURES. NASA HAS INDICATED
FURTHER THAT WHILE A REPRESENTATIVE OF YOUR CLIENT'S COMPANY INDICATED
THAT CERTAIN DEFICIENCIES IN THE SUBMITTAL COULD BE CORRECTED, IT WAS
RETURNED FOR CORRECTION TO THE CONTRACTOR WHO INSTEAD CHOSE TO EMPLOY
ANOTHER SUPPLIER AND TO SUBMIT DIFFERENT DRAWINGS.
IN THAT CONNECTION, NASA HAS STATED THAT A REPRESENTATIVE OF METAL
STRUCTURES STATED THAT 24-GAUGE PANELS COULD BE SUPPLIED INSTEAD OF THE
26-GAUGE PANELS SHOWN ON THE SUBMITTED DRAWINGS AND THAT THIS WOULD HAVE
BEEN CONSIDERED IF THE CONTRACTOR HAD SO INDICATED UPON RESUBMITTAL.
FURTHER, NASA HAS STATED THAT IT WOULD HAVE CONSIDERED PANELS WITHOUT
THE 3-INCH RIB FEATURE IF A SUBSEQUENT SUBMITTAL WOULD HAVE CLEARLY
DETAILED A DESIGN ANALYSIS WHICH WOULD HAVE SHOWN THE DESIGN TO BE EQUAL
TO THAT SPECIFIED. HOWEVER, NASA HAS INDICATED THAT IT CONSIDERS THE
REQUIREMENT FOR CONCEALED WALL FASTENERS TO BE IMPORTANT AND THAT THE
EXPOSED FASTENERS PROPOSED BY YOUR CLIENT ARE OBJECTIONABLE BECAUSE THEY
PROVIDE AN OPPORTUNITY FOR WATER PENETRATION AND EVENTUAL RUST DAMAGE
WHICH CONCEALED FASTENERS DO NOT. ADDITIONALLY, NASA STATES THAT
INTERLOCKING PANELS MINIMIZE THE NUMBER OF EXTERIOR PENETRATIONS OF THE
FERROUS METAL SKIN AND OFFER AN ADDITIONAL SAFETY FACTOR OVER THE USE OF
FASTENERS ALONE. MOREOVER, NASA EXPLAINS THAT IT REQUIRED INSULATION IN
THE WALLS OF A TYPE DIFFERENT FROM THAT IN THE ROOF BECAUSE THE
INSULATION WOULD BE SEALED IN THE WALLS AND WOULD BE DIFFICULT TO
EXAMINE OR REPAIR IF IT BECAME SATURATED THROUGH LEAKAGE, WHEREAS THE
ROOF INSULATION IS EXPOSED ON THE INTERIOR SIDE AND CAN EASILY BE
EXAMINED AND REPAIRED IF NECESSARY. THEREFORE, NASA BELIEVES THE
DIFFERENCE BETWEEN THE
INSULATION IN THE WALLS AND IN THE ROOF IS JUSTIFIED BY THE
DIFFERENCE IN LOCATION.
YOU HAVE STATED THAT WHILE THERE ARE A NUMBER OF FIRMS WHICH PRODUCE
A WALL SYSTEM OF THE NATURE REQUIRED BY THE SPECIFICATION, THEY DO NOT
MANUFACTURE PREFABRICATED BUILDINGS AND IF METAL STRUCTURES PURCHASED
THEIR PANELS IT WOULD NOT BE COMPLYING WITH THE SPECIFICATION WHICH YOU
STATE REQUIRES THE BUILDING TO BE BY A MANUFACTURER ENGAGED IN THE
MANUFACTURE OF PREFABRICATED BUILDINGS. NASA DENIES THAT THE
SPECIFICATION INCLUDES SUCH A REQUIREMENT. IT STATES THAT THE
SPECIFICATION REQUIRES THAT THE DESIGN OF THE BUILDING SHALL BE IN
CONFORMANCE WITH THE RECOMMENDED DESIGN PRACTICES MANUAL PUBLISHED BY
METAL BUILDING MANUFACTURER'S ASSOCIATION BUT THAT THIS DOES NOT
PRECLUDE THE USE OF A METAL PANEL PRODUCED BY ANOTHER MANUFACTURER.
YOU STATE THAT THE BUREAU OF YARDS AND DOCKS HAS ON NUMEROUS
OCCASIONS CHANGED SPECIFICATIONS TO PERMIT MORE METAL BUILDING
MANUFACTURERS TO QUALIFY THAN THE NASA SPECIFICATION PERMITS. HOWEVER,
THE MATTER OF THE AGENCY'S NEEDS IS FOR THE AGENCY TO DECIDE FOR ITSELF
AND THE FACT THAT
ANOTHER AGENCY HAS A MORE LIBERAL OR EVEN A MORE STRINGENT
REQUIREMENT IS NOT CONTROLLING.
ALSO, WHILE YOU STATE THAT YOUR CLIENT FEELS THAT ARMCO STEEL
CORPORATION IS BEING PREFERRED BY NASA, THE AGENCY HAS INDICATED THAT
EACH STRUCTURE WHICH IT BUILDS IS DESIGNED TO PROVIDE A FUNCTIONAL
FACILITY CONSISTENT WITH ITS MISSION AND DURATION AND THAT THE
SPECIFICATIONS VARY ACCORDING TO ITS NEEDS FOR EACH FACILITY INVOLVED.
NASA POINTS OUT THAT OTHER METAL BUILDINGS ARE UNDER CONSTRUCTION AT THE
LANGLEY RESEARCH CENTER WITH PANELS PRODUCED BY BUTLER MANUFACTURING
COMPANY, THE INLAND STEEL COMPANY AND H. H. ROBERTSON COMPANY.
IF METAL STRUCTURES WAS ABLE TO OVERCOME THE DEFICIENCIES STATED BY
NASA IN RETURNING THE DRAWINGS FOR CORRECTION TO EASTERN CONSTRUCTION
CORPORATION, THEN IT IS A MATTER STRICTLY BETWEEN EASTERN AND YOUR
CLIENT AS TO WHY THE LATTER WAS NOT GIVEN THE OPPORTUNITY TO RESUBMIT
ITS OFFER. IF YOUR CLIENT DID NOT RESUBMIT THE MATTER BECAUSE IT WAS
UNABLE OR UNWILLING TO MEET ALL THE NASA OBJECTIONS, THEN THE QUESTION
IS WHETHER THE REQUIREMENTS IN THE SPECIFICATIONS WERE UNDULY
RESTRICTIVE. ON THAT POINT, AS INDICATED ABOVE, NASA HAS REPRESENTED
THAT THE SPECIFICATIONS WERE ESSENTIAL TO ITS REQUIREMENTS. IN THAT
REGARD, IT HAS BEEN THE POSITION OF OUR OFFICE THAT IF A PARTICULAR
COMPANY MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR
SUPPLYING THE AGENCY'S NEED, THIS DOES NOT WARRANT A CONCLUSION THAT THE
SPECIFICATIONS WERE UNDULY RESTRICTIVE. 30 COMP. GEN. 368 AND 33 ID.
586.
IN THE CIRCUMSTANCES, WE SEE NO JUSTIFICATION FOR ANY DEPARTURE FROM
THE CONCLUSION REACHED IN OUR SEPTEMBER 28 DECISION. THE DENIAL OF THE
PROTEST IS THEREFORE SUSTAINED.
B-157680, DEC. 8, 1965
TO LINNY C. BUSBY, EOH2, USNR:
FURTHER REFERENCE IS MADE TO YOUR CLAIM FOR TRAVEL ALLOWANCE FROM
JACKSON, MISSOURI, TO PORT HUENEME, CALIFORNIA, AND RETURN INCIDENT TO
ORDERS DATED MARCH 5, 1965, FOR ACTIVE DUTY TRAINING IN THE UNITED
STATES NAVAL RESERVE.
THESE ORDERS PLACED YOU ON ACTIVE DUTY FOR TRAINING NOT TO EXCEED 14
DAYS AND AUTHORIZED YOU TO TRAVEL BY COMMERCIAL TRANSPORTATION (TR'S AND
MEAL TICKETS FURNISHED) TO YOUR DUTY STATION AT THE NAVAL CB CENTER,
PORT HUENEME. AN ENDORSEMENT ON YOUR ORDERS SHOWS THAT A BUS HAD BEEN
CHARTERED FOR TRAVEL FROM CAPE GIRARDEAU, MISSOURI, TO ST. LOUIS,
MISSOURI, AND RETURN, AND THAT A PLANE HAD BEEN CHARTERED FOR TRAVEL
FROM ST. LOUIS, MISSOURI, TO POINT MUGU, CALIFORNIA, AND RETURN, FOR THE
PURPOSE OF TRANSPORTING YOU AND OTHER NAVAL RESERVISTS TO AND FROM
THE PLACE OF TRAINING DUTY IN CALIFORNIA, SUCH TRANSPORTATION DEPARTING
FROM CAPE GIRARDEAU ON MARCH 28, 1965, AND RETURNING ON APRIL 11, 1965.
HOWEVER, YOU SAY YOU CHOSE TO TRAVEL AT YOUR OWN EXPENSE AND ARE
CLAIMING REIMBURSEMENT THEREFOR ON A MILEAGE BASIS.
SECTION 404 OF TITLE 37, UNITED STATES CODE, PROVIDES THAT UNDER
REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, A MEMBER OF A
UNIFORMED SERVICE IS ENTITLED TO TRANSPORTATION IN KIND, REIMBURSEMENT
THEREFOR, OR A MONETARY ALLOWANCE IN PLACE OF THE COST OF TRANSPORTATION
FOR TRAVEL PERFORMED UNDER ORDERS TO ACTIVE DUTY AND UPON RELEASE FROM
ACTIVE DUTY. AS A GENERAL RULE AND IN THE ABSENCE OF A PROHIBITORY
STATUTE, A MEMBER MAY ELECT TO MAKE USE OF SOME MODE OF TRANSPORTATION
OTHER THAN THAT PROVIDED IN HIS ORDERS IF THE INTERESTS OF THE
GOVERNMENT ARE NOT JEOPARDIZED THEREBY. SEE 18 COMP. GEN. 477; 21
COMP. GEN. 116. ON THIS BASIS IT HAS BEEN RECOGNIZED THAT A MEMBER WHO
IS AUTHORIZED TO USE COMMERCIAL TRANSPORTATION BUT WHO TRAVELS BY
PRIVATELY OWNED VEHICLE IS ENTITLED TO A TRAVEL ALLOWANCE AT 5 CENTS A
MILE WHERE NO PAYMENT WAS REQUIRED FOR THE AUTHORIZED COMMERCIAL
TRANSPORTATION. IN DECISION OF FEBRUARY 24, 1961, 40 COMP. GEN. 482,
IT WAS HELD THAT AFTER THE CONVERSION OF THE MILITARY SEA TRANSPORTATION
SERVICE AND THE MILITARY AIR TRANSPORT SERVICE TO INDUSTRIAL FUND
FINANCED ACTIVITIES AND THE ESTABLISHMENT OF STANDARD CHARGES FOR
TRANSPORTATION BY THESE ACTIVITIES, MEMBERS OF THE UNIFORMED SERVICES
WHO ARE AUTHORIZED, AS DISTINGUISHED FROM SPECIFICALLY DIRECTED, TO
TRAVEL BY GOVERNMENT CONVEYANCE, AND WHO DO NOT USE AVAILABLE GOVERNMENT
TRANSPORTATION BUT USE COMMERCIAL TRANSPORTATION AT PERSONAL EXPENSE,
MAY BE REIMBURSED UNDER THE APPLICABLE PROVISIONS OF THE JOINT TRAVEL
REGULATIONS FOR THE COST OF SUCH TRAVEL ON THE BASIS OF THE STANDARD
CHARGES WHICH THE SPONSORING SERVICE WOULD HAVE BEEN REQUIRED TO PAY HAD
THE TRAVEL BEEN BY GOVERNMENT TRANSPORTATION. SEE ALSO 41 COMP. GEN.
100. REIMBURSEMENT ON THIS BASIS DOES NOT JEOPARDIZE THE INTERESTS OF
THE GOVERNMENT.
IN YOUR CASE, YOUR ORDERS OF MARCH 5, 1965, AUTHORIZED COMMERCIAL
TRANSPORTATION CONTEMPLATING THE USE OF THE COMMERCIAL BUS AND AIRPLANE
THAT HAD BEEN CHARTERED BY THE GOVERNMENT. THE GOVERNMENT WAS REQUIRED
TO PAY FOR SUCH TRANSPORTATION EVEN THOUGH YOU AND SOME OF THE OTHER
RESERVISTS ORDERED TO TRAINING DUTY DID NOT USE IT. SINCE THE INTERESTS
OF THE GOVERNMENT WERE JEOPARDIZED BY YOUR FAILURE TO USE THE AUTHORIZED
AND AVAILABLE TRANSPORTATION, THERE APPEARS TO BE NO BASIS TO REIMBURSE
YOU FOR THE EXPENSES INCURRED IN PERFORMING THE REQUIRED TRAVEL. AS YOU
POINT OUT, YOUR ORDERS DID NOT SPECIFICALLY DIRECT YOU TO USE THE
AVAILABLE COMMERCIAL TRANSPORTATION, BUT NEITHER DID THEY AUTHORIZE YOU
TO TRAVEL BY PRIVATELY OWNED VEHICLE. NEITHER 37 U.S.C. 404 NOR THE
JOINT TRAVEL REGULATIONS CONTEMPLATE THAT THE GOVERNMENT WILL PAY TWICE
FOR A MEMBER'S TRANSPORTATION BECAUSE HE ELECTS FOR HIS OWN CONVENIENCE
TO TRAVEL BY A MEANS OTHER THAN THAT AUTHORIZED AND MADE AVAILABLE TO
HIM.
ACCORDINGLY, THE SETTLEMENT OF AUGUST 18, 1965, DISALLOWING YOUR
CLAIM WAS CORRECT AND IS SUSTAINED. YOUR ORIGINAL ORDERS ARE RETURNED
HEREWITH.
B-157813, DEC. 8, 1965
TO INDUSTRIAL METAL FABRICATING CO., INC. :
REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 7, 1965, PROTESTING
AGAINST THE ACTION OF THE DEPARTMENT OF THE ARMY, REDSTONE ARSENAL,
HUNTSVILLE, ALABAMA, IN HAVING TERMINATED, FOR DEFAULT, YOUR RIGHT TO
PROCEED UNDER CONTRACT NO. DA-01-021-AMC-12512 (Z).
IT APPEARS FROM YOUR TELEGRAM THAT THE INSTANT MATTER WAS THE SUBJECT
OF A DECISION OF THE CONTRACTING OFFICER WHICH, YOU STATE, WAS RECEIVED
BY YOU ON SEPTEMBER 27, 1965. YOU INDICATE THAT IN SUCH DECISION THE
CONTRACTING OFFICER INFORMED YOU THAT IT WAS HIS DECISION THAT YOUR FIRM
HAD DEFAULTED IN THE PERFORMANCE OF THE CONTRACT BY FAILING TO MAKE
DELIVERY WITHIN THE TIME SPECIFIED AND FAILING TO MAKE PROGRESS SO AS TO
ENDANGER THE PERFORMANCE OF THE CONTRACT. WE HAVE BEEN INFORMALLY
ADVISED BY THE DEPARTMENT OF THE ARMY THAT BY LETTER DATED NOVEMBER 5,
1965, YOU APPEALED THE CONTRACTING OFFICER'S ADVERSE DECISION TO THE
ARMED SERVICES BOARD OF CONTRACT APPEALS.
THE APPEAL OF YOUR FIRM NOW PENDING BEFORE THE ARMED SERVICES BOARD
OF CONTRACT APPEALS WAS MADE PURSUANT TO THE "DISPUTES" CLAUSE OF THE
CONTRACT WHICH PROVIDES FOR THE ADMINISTRATIVE SETTLEMENT OF DISPUTES
CONCERNING QUESTIONS OF FACT ARISING UNDER THE CONTRACT. THE "DISPUTES"
CLAUSE STATES IN PART THAT "THE DECISION OF THE SECRETARY OR HIS DULY
AUTHORIZED REPRESENTATIVE FOR THE DETERMINATION OF SUCH APPEALS SHALL BE
FINAL AND CONCLUSIVE UNLESS DETERMINED BY A COURT OF COMPETENT
JURISDICTION TO HAVE BEEN FRAUDULENT, OR CAPRICIOUS, OR ARBITRARY, OR SO
GROSSLY ERRONEOUS WAS NECESSARILY TO IMPLY BAD FAITH, OR NOT SUPPORTED
BY SUBSTANTIAL EVIDENCE.' THESE ARE THE STANDARDS OF JUDICIAL REVIEW
CONCERNING ADMINISTRATIVE DECISIONS ON FACTUAL ISSUES WHICH ARE MADE
FINAL AND CONCLUSIVE BY THE TERMS OF A GOVERNMENT CONTRACT. SEE THE
WUNDERLICH ACT, APPROVED MAY 11, 1954, 41 U.S.C. 321.
SINCE THE ISSUES OF THE CASE HERE INVOLVED ARE ESSENTIALLY OF A
FACTUAL NATURE IT WOULD NOT APPEAR PROPER FOR US TO CONSIDER THE MERITS
OF YOUR COMPLAINT UNTIL AFTER THE DECISION BY THE ARMED SERVICES BOARD
OF CONTRACT APPEALS. BOTH YOUR COMPANY AND THE GOVERNMENT ARE BOUND TO
FOLLOW THE PROCEDURE SET OUT IN THE CONTRACT FOR THE ADMINISTRATIVE
SETTLEMENT OF DISPUTES ON QUESTIONS OF FACT ARISING OUT OF THE CONTRACT
AND THE CONTRACTOR MUST, OF COURSE, EXHAUST ITS ADMINISTRATIVE REMEDIES
UNDER THE "DISPUTES" CLAUSE BEFORE MAKING AN APPEAL EITHER TO OUR OFFICE
OR THE COURTS. SEE, GENERALLY, B. H. DEACON CO. V. UNITED STATES, 189
F.SUPP. 146; AND HAPPEL V. UNITED STATES, 176 F.SUPP. 787, AFFIRMED
279 F.2D 88.
B-157879, DEC. 8, 1965
TO LIEUTENANT EDWARD L. WEBER, MC, USNR:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1965, IN
EFFECT REQUESTING RECONSIDERATION OF SETTLEMENT DATED OCTOBER 5, 1965,
WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT FOR COST OF MOVING YOUR
HOUSEHOLD GOODS FROM TEMPORARY STORAGE TO RESIDENCE AND RETURN TO
STORAGE ON MAY 12, 1965, INCIDENT TO YOUR RELEASE FROM ACTIVE DUTY IN
THE UNITED STATES NAVAL RESERVE ON MARCH 27, 1965.
ON MARCH 17, 1965, YOUR HOUSEHOLD GOODS WERE RECEIVED FOR SHIPMENT
FROM OAK HARBOR, WASHINGTON, TO PHILADELPHIA, PENNSYLVANIA, WHERE
STORAGE IN TRANSIT WAS AUTHORIZED FOR 180 DAYS AT GOVERNMENT EXPENSE.
IN YOUR UNDATED STATEMENT TO THE NAVY DEPARTMENT CLAIMING REIMBURSEMENT
OF MOVING EXPENSES YOU SAY THAT ON MAY 12, 1965, YOUR HOUSEHOLD GOODS
WERE DELIVERED FROM STORAGE IN PHILADELPHIA TO AN ADDRESS IN
PHILADELPHIA AND RETURNED TO STORAGE THE SAME DATE SINCE CONSTRUCTION OF
AN APARTMENT WAS NOT COMPLETED AND YOU HAD DECIDED NOT TO LIVE THERE.
YOU ALSO SAY THAT THE DIRECTIVE FOR THIS DELIVERY WAS GIVEN BY THE
PHILADELPHIA HOUSEHOLD EFFECTS OFFICE AS THE RESULT OF A MUTUAL
MISUNDERSTANDING ON MAY 4, 1965, WHEN YOU CONTACTED THAT OFFICE. IT
APPEARS THAT AS A RESULT OF YOUR INSTRUCTIONS THE HOUSEHOLD EFFECTS
OFFICE THOUGHT YOU WANTED DELIVERY OF YOUR HOUSEHOLD GOODS ON MAY 12,
1965, AND YOU BELIEVED THE AGREEMENT TO BE THAT IF YOU WANTED DELIVERY
ON THIS DATE YOU SHOULD CALL 3 DAYS PRIOR TO IT TO CONFIRM THE DATE.
SINCE YOU DECIDED NOT TO MOVE TO THE ADDRESS WHERE YOUR HOUSEHOLD GOODS
WERE DELIVERED ON MAY 12, 1965, YOU WITHHELD THE CONFIRMING CALL AND
FELT THAT NO DELIVERY WOULD BE MADE.
SECTION 406 OF TITLE 37, UNITED STATES CODE, PROVIDES THAT IN
CONNECTION WITH A PERMANENT CHANGE OF STATION, A MEMBER IS ENTITLED TO
TRANSPORTATION (INCLUDING PACKING, CRATING, DRAYAGE, TEMPORARY STORAGE,
AND UNPACKING) OF BAGGAGE AND HOUSEHOLD EFFECTS, OR REIMBURSEMENT
THEREFOR, SUBJECT TO SUCH CONDITIONS AND LIMITATIONS AS MAY BE
PRESCRIBED BY THE SECRETARIES CONCERNED. PARAGRAPH M8259-1 OF THE JOINT
TRAVEL REGULATIONS, PROMULGATED PURSUANT TO THAT AUTHORITY, PROVIDES
THAT A MEMBER ON ACTIVE DUTY WHO IS SEPARATED FROM THE SERVICE OR
RELIEVED FROM ACTIVE DUTY, EXCEPT FOR CERTAIN REASONS NOT APPLICABLE TO
YOUR CASE, IS ENTITLED TO SHIPMENT OF HOUSEHOLD GOODS FROM THE MEMBER'S
LAST OR ANY PREVIOUS DUTY STATION, FROM A DESIGNATED PLACE IN THE UNITED
STATES, OR FROM PLACE OF STORAGE, OR ANY COMBINATION THEREOF, TO THE
PLACE TO WHICH THE MEMBER ELECTS TO RECEIVE TRAVEL ALLOWANCES FOR HIS
TRAVEL ON SUCH SEPARATION OR RELIEF FROM ACTIVE DUTY. PARAGRAPH M8012
OF THE REGULATIONS PROVIDES THAT WHEN HOUSEHOLD GOODS WITHIN PRESCRIBED
WEIGHT ALLOWANCE HAVE BEEN IMPROPERLY SHIPPED OR OTHERWISE UNAVOIDABLY
SEPARATED FROM THE MEMBER, THROUGH NO FAULT OF HIS OWN, THEY MAY BE
FORWARDED TO THE PROPER DESTINATION AT GOVERNMENT EXPENSE UPON APPROVAL
OF THE UNIFORMED SERVICE CONCERNED.
THUS, THE JOINT TRAVEL REGULATIONS CONTEMPLATE THE SHIPMENT OF
HOUSEHOLD GOODS TO AUTHORIZED POINTS AT THE REQUEST OF THE MEMBER, BUT
IT IS THE OWNER'S RESPONSIBILITY TO MAKE PROPER ARRANGEMENTS FOR THE
DELIVERY OF HIS GOODS TO THE DESIRED DESTINATION AND FOR THEIR
ACCEPTANCE UPON ARRIVAL. THE REGULATIONS TAKE COGNIZANCE OF THE FACT
THAT GOODS OCCASIONALLY MAY BE IMPROPERLY SHIPPED WITHOUT FAULT ON THE
PART OF THE MEMBER AND AUTHORIZE REIMBURSEMENT OF COSTS FOR SUCH
SHIPMENT. IN YOUR CASE, HOWEVER, YOU AND THE NAVY HOUSEHOLD EFFECTS
OFFICE AGREE THAT THE MOVING OF YOUR GOODS TO AND FROM STORAGE ON MAY
12, 1965, WAS THE RESULT OF A MUTUAL MISTAKE. IN VIEW THEREOF AND SINCE
THE REGULATIONS AUTHORIZE REIMBURSEMENT OF COSTS FOR SUCH MOVEMENT ONLY
WHEN IT IS MADE WITHOUT FAULT ON THE PART OF THE MEMBER, THERE IS NO
AUTHORITY TO ALLOW YOUR CLAIM.
ACCORDINGLY, THE SETTLEMENT OF OCTOBER 5, 1965, DISALLOWING YOUR
CLAIM WAS CORRECT AND IS SUSTAINED.
WITH REGARD TO YOUR REQUEST AS TO THE PROPER METHOD TO APPEAL OUR
DECISION, YOU ARE ADVISED THAT SECTION 74 OF TITLE 31, UNITED STATES
CODE, PROVIDES THAT THE DECISION OF THE COMPTROLLER GENERAL OF THE
UNITED STATES ON THE SETTLEMENT OF PUBLIC ACCOUNTS SHALL BE FINAL AND
CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT. ASIDE FROM THE
JURISDICTION OF THIS OFFICE, HOWEVER, THE COURT OF CLAIMS HAS AUTHORITY
TO CONSIDER CERTAIN CLAIMS AGAINST THE UNITED STATES, IF FILED WITHIN 6
YEARS FROM DATE FIRST ACCRUING. 28 U.S.C. 1491 AND 2501.
B-155614, DEC. 7, 1965
TO MR. HYMAN J. COHEN:
REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 11, 1965, REQUESTING
RECONSIDERATION OF OUR DISALLOWANCE, BY SETTLEMENT CERTIFICATE DATED
JANUARY 12, 1965, OF THE CLAIM OF ERICH E. H. ZENKER IN THE AMOUNT OF
$18,890, REPRESENTING UNLIQUIDATED DAMAGES ALLEGEDLY DUE UNDER CONTRACT
NO. DA-91-503-EUC-16542, DATED OCTOBER 26, 1959.
THE FILES INDICATE THAT THE CONTRACT CONTAINED THE STANDARD CLAUSES
PERTAINING TO THE COVENANT AGAINST CONTINGENT FEES AND DISPUTES. IN
JANUARY OR FEBRUARY, 1960, IT WAS DISCOVERED THAT THE ZENKER FIRM HAD
RETAINED AND PAID AN AGENT FOR THE PURPOSE OF OBTAINING GOVERNMENT
CONTRACTS, IN VIOLATION OF THE CONTINGENT FEES COVENANT. PURSUANT TO
ARMY PROCUREMENT POLICY 1-508.2, THE CONTRACTING OFFICER REPORTED THIS
FACT TO THE DIRECTOR OF PROCUREMENT, AS THE DULY AUTHORIZED
REPRESENTATIVE OF THE HEAD OF THE PROCURING ACTIVITY. THE DIRECTOR
INDORSED THE SUBMISSION AS FOLLOWS:
"* * * DETERMINATION IS MADE THAT ACTION UNDER THE PROVISIONS OF ASPR
1-508.2 (II) IS APPROPRIATE UNDER CIRCUMSTANCES CITED IN BASIC
COMMUNICATION AND RECOMMENDS THAT ANNULMENT BE ACCOMPLISHED.'
IN ACCORDANCE WITH THIS REPLY, THE CONTRACTING OFFICER ADVISED ZENKER
ON FEBRUARY 19, 1960, THAT THE CONTRACT WOULD BE ANNULLED AS OF THE END
OF THE DAY ON FEBRUARY 23, 1960. AT THE REQUEST OF ZENKER, THIS DATE
WAS EXTENDED UNTIL MARCH 28, 1960, TO COMPLETE WORK CURRENTLY IN
PROCESS, AND ON APRIL 19, 1960, THE CONTRACTING OFFICER REAFFIRMED THE
ANNULMENT. ON JANUARY 25, 1961, THE ZENKER FIRM FILED A CLAIM FOR
DAMAGES IN THE AMOUNT OF $20,143.20, REPRESENTING UNUSED MATERIALS,
UNPRODUCTIVE LABOR, LEGAL COSTS, LOSS OF INTEREST AND LOSS OF PROFITS.
THE CONTRACTING OFFICER ADVISED ZENKER THAT, SINCE NO APPEAL HAD BEEN
TAKEN, THE ANNULMENT WAS FINAL AND CONCLUSIVE. ZENKER THEN APPEALED TO
THE BOARD OF CONTRACT APPEALS, WHICH AFFIRMED THE POSITION TAKEN BY THE
CONTRACTING OFFICER THAT THE ANNULMENT WAS FINAL DUE TO FAILURE TO FILE
A TIMELY APPEAL. IT IS ZENKER'S CONTENTION THAT THE ACTION OF THE
CONTRACTING OFFICER ANNULLING THE CONTRACT WAS WITHOUT AUTHORITY, SINCE
THAT AUTHORITY WAS VESTED IN THE DIRECTOR OF PROCUREMENT.
ARMY PROCUREMENT POLICY 1-508.50 PROVIDES:
"THE HEAD OF A PROCURING ACTIVITY, OR HIS DULY AUTHORIZED
REPRESENTATIVES, SHALL, IN ANY CASE FORWARDED BY A CONTRACTING OFFICER
PURSUANT TO THIS PARAGRAPH, TAKE OR CAUSE TO BE TAKEN, ONE OR MORE OF
THE ACTIONS SET FORTH IN ASPR 1-508.2.'
THE INDORSEMENT OF THE DIRECTOR OF PROCUREMENT WAS, IN FACT, A
DIRECTION TO THE CONTRACTING OFFICER TO ANNUL THE CONTRACT, AND THE
ACTION OF THE CONTRACTING OFFICER WAS MERELY AN ENFORCEMENT OF THE
DIRECTOR'S ORDER. THEREFORE, THE ANNULMENT WAS EFFECTED BY THE
AUTHORITY OF THE DIRECTOR OF PROCUREMENT RATHER THAN THE CONTRACTING
OFFICER. UNDER THESE CIRCUMSTANCES, IT APPEARS THAT THE ANNULMENT
BECAME FINAL AND CONCLUSIVE IN THE ABSENCE OF AN APPEAL.
FURTHERMORE, EVEN IF THE ANNULMENT HAD NOT BECOME FINAL AND
CONCLUSIVE, THE CLAIM IS ONE FOR UNLIQUIDATED DAMAGES ARISING OUT OF AN
ALLEGED BREACH OF CONTRACT. OUR OFFICE GENERALLY DECLINES TO ALLOW THIS
TYPE OF CLAIM BECAUSE OF THE IMPRACTICABILITY OF REACHING AN ACCURATE
DETERMINATION OF ITS MERITS WITHOUT PROVISION FOR THE TAKING OF SWORN
TESTIMONY, CROSS-EXAMINATION AND THE SUBMISSION OF RELATED EVIDENCE, FOR
WHICH WE LACK THE NECESSARY FACILITIES. IN SUCH CASES, THE CLAIMANTS
ARE LEFT TO PURSUE IN THE COURTS SUCH REMEDIES AS MAY BE AVAILABLE. SEE
LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291; AND CHARLES V. UNITED
STATES, 19 ID. 316, 319.
B-156453, DEC 7, 1965
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
RUBIN GERTZ, ATTORNEY OF LAW:
REFERENCE IS MADE TO OUR CONFERENCE OF NOVEMBER 15, 1965, AND TO YOUR
LETTER OF NOVEMBER 19, 1965, ENCLOSING A SUPPLEMENTAL MEMORANDUM OF
AUTHORITIES RELATIVE TO FURTHER CONSIDERATION OF THE CLAIM OF YOUR
CLIENT, CAPTAIN ARTHUR B. WILTSHIRE, FOR BASIC ALLOWANCE FOR QUARTERS AS
AN OFFICER WITH A DEPENDENT (WIFE).
SUCH CLAIM WAS DISALLOWED BY OUR DECISION OF APRIL 27, 1965, TO AN
ARMY DISBURSING OFFICER, AND THE DISALLOWANCE WAS SUSTAINED IN OUR
DECISION OF SEPTEMBER 23, 1965, ADDRESSED TO CAPTAIN WILTSHIRE IN YOUR
CARE. WE TOOK THAT ACTION BECAUSE OF OUR DOUBT THAT CAPTAIN WILTSHIRE
HAS ESTABLISHED THAT MRS. VERA WILTSHIRE IS HIS "SPOUSE" WITHIN THE
MEANING OF THE DEFINITION OF "DEPENDENT" IN 37 U. S. C. 401, FOR
PURPOSES OF PAYMENT OF INCREASED QUARTERS ALLOWANCE.
AT OUR CONFERENCE YOU CONTENDED, AND IN YOUR SUPPLEMENTAL MEMORANDUM
YOU CONTINUE TO CONTEND, THAT CAPTAIN WILTSHIRE SHOULD BE GRANTED THE
BASIC ALLOWANCE FOR QUARTERS AUTHORIZED FOR MARRIED OFFICERS AND IN
SUPPORT OF YOUR CONTENTION YOU TAKE THE POSITION THAT -
"*** CAPTAIN ARTHUR B. WILTSHIRE IS LEGALLY AND VALIDLY MARRIED TO
HIS PRESENT WIFE, VERA J. WILTSHIRE, HAVING BEEN LEGALLY MARRIED UNDER
THE LAWS OF MARYLAND ON JUNE 20, 1964 IN THE CITY OF BALTIMORE, STATE OF
MARYLAND. THE LEGALITY AND VALIDITY OF THIS MARYLAND MARRIAGE HAS NOT
BEEN ATTACKED BY EITHER CAPTAIN WILTSHIRE, HIS WIFE, VERA WILTSHIRE, NOR
THE STATE OF MARYLAND, WHO ARE THE ONLY PARTIES THAT CAN VALIDLY ATTACK
THE SAID MARRIAGE. IN FURTHER SUPPORT OF THE VALIDITY OF THE PRESENT
SECOND MARRIAGE, NO ONE WHO HAS A LEGAL INTEREST IN THE DIVORCE OF THE
FIRST MARRIAGE HAS ATTACKED THE VALIDITY OF THE SAID DIVORCE.
"IT IS OUR POSITION THAT CAPTAIN WILTSHIRE'S SECOND MARRIAGE IS VALID
UNDER THE CASES AND DECISIONS OF THE VARIOUS STATE AND FEDERAL COURTS
FOUNDED ON THE LEGAL DOCTRINES OF ESTOPPEL, PUBLIC POLICY, FULL FAITH
AND CREDIT CLAUSE, COMITY AND EQUITY. ***"
WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS YOU HAVE MADE AND THE
PRECEDENTS AND AUTHORITIES YOU HAVE CITED BUT FOR THE REASONS STATED IN
OUR PRIOR DECISIONS, AND HEREINAFTER STATED, WE MUST HOLD THAT CAPTAIN
WILTSHIRE'S STATUS AS AN OFFICER WITH DEPENDENT (WIFE) IS TOO DOUBTFUL
TO PERMIT US TO APPROVE THE PAYMENT TO HIM OF BASIC ALLOWANCE FOR
QUARTERS AS AN OFFICER WITH A DEPENDENT.
MOST OF THE DECISIONS YOU HAVE CITED HAVE BEEN OFFERED TO SUPPORT THE
PROPOSITION THAT IN THE CASE OF CONFLICTING MARRIAGES OF THE SAME PERSON
THE PRESUMPTION OR INFERENCE OF VALIDITY OPERATES IN FAVOR OF THE SECOND
(LATEST) MARRIAGE. WE RECOGNIZE THAT THERE ARE MANY AUTHORITIES WHICH
SUPPORT THIS PROPOSITION. THE PRESUMPTION, HOWEVER, IS NOT CONCLUSIVE
BUT MAY BE REBUTTED AND THE DECISIONS OF THE COURTS ARE NOT UNIFORM AS
TO THE EVIDENCE NECESSARY TO REBUT THE PRESUMPTION. FOR EXAMPLE IN
TATUM V. TATUM (U. S. C. A. 9TH CIR. 1957), 241 F. 2D 401, IT WAS SAID
THAT UNDER CALIFORNIA LAW, DESPITE THE STRENGTH OF THE PRESUMPTION OF
VALIDITY OF THE LATER MARRIAGE, IT MERELY REQUIRES THE ADVOCATE OF A
PRIOR MARRIAGE TO ESTABLISH BY COMPETENT EVIDENCE A PRIMA FACIE CASE OF
REGULARLY SOLEMNIZED PRIOR MARRIAGE AND THEN WITH TWO PRESUMPTIVELY
VALID MARRIAGES IN EXISTENCE, THE ULTIMATE BURDEN RESTS ON THE PARTY WHO
ADVOCATES THE SECOND TO PROVE THE INVALIDITY OF THE FIRST. SEE, ALSO,
THE DISCUSSION AND CASES CITED IN 23 COMP. GEN. 128 AT PAGE 129.
WITH RESPECT TO YOUR CONTENTIONS REGARDING THE DOCTRINE OF ESTOPPEL,
WE ARE NOT SATISFIED THAT THERE IS ANY GENERAL RULE UNDER WHICH BOTH
PARTIES TO BOTH OF CAPTAIN WILTSHIRE'S MARRIAGES WOULD BE ESTOPPED TO
DENY THE VALIDITY OF THE MEXICAN DIVORCE IN HIS CASE. REGARDLESS OF
THAT, HOWEVER, AS WE HELD IN 36 COMP. GEN. 121, 123 (CITING PETITION OF
TAFFEL, 49 F. SUPP. 109), THE FEDERAL GOVERNMENT OF A STATE WOULD NOT
BE ESTOPPED FROM CHALLENGING THE VALIDITY OF SUCH A FOREIGN DIVORCE
DECREE WHEN THEIR INTERESTS MIGHT BE ADVERSELY AFFECTED.
IN OUR DECISION OF APRIL 27, 1965, WE CITED 25 COMP. GEN. 821 AND 36
COMP. GEN. 121 AS EXAMPLES OF DECISIONS OF THE COMPTROLLER GENERAL IN
WHICH IT WAS HELD, IN EFFECT, THAT WHERE THE VALIDITY OF A SECOND
MARRIAGE IS DEPENDENT UPON THE DISSOLUTION OF THE FIRST MARRIAGE BY A
DIVORCE DECREE OF A MEXICAN COURT WHICH HAS NOT BEEN RECOGNIZED BY A
COURT OF COMPETENT JURISDICTION IN THE UNITED STATES, THE MARITAL STATUS
OF THE PARTIES IS OF TOO DOUBTFUL LEGALITY FOR US TO APPROVE PAYMENT OF
AN ALLOWANCE SUCH AS THE ONE HERE INVOLVED.
A BASIC REASON FOR THIS RULE IS THAT IT APPEARS THAT MOST COURTS IN
THIS COUNTRY DO NOT RECOGNIZE MEXICAN DIVORCE DECREES AS VALID UNDER
MOST CIRCUMSTANCES. SEE, FOR EXAMPLE, THE COURT CASES CITED IN 36 COMP.
GEN. 121 AT PAGE 123. SEE, ALSO, THE LATER CASE OF WARRENDER V.
WARRENDER (NEW JERSEY, 1963), 190 A. 2D 684, AND THE DIGESTS OF THE
CALIFORNIA CASES OF SOHNLEIN V. WINCHELL (CAL. APP. 1964, 41 CAL. RPTS.
145), SCHOTTE V. SCHOTTE (CAL. APP. 1962, 21 CAL. RPTS. 220) AND IN RE
EDGETT'S ESTATE (CAL. APP. 1961, 10 CAL. RPTS. 552) WHICH APPEAR UNDER
"DIVORCE" IN WEST'S GENERAL DIGEST, THIRD SERIES: VOL. 27, PAGE 588,
KEY 352(1); VOL. 19, PAGE 686, KEY 358; VOL. 15, PAGE 699, KEY 359(3),
RESPECTIVELY. YOU WILL NOTE THAT THE COURT IN THE WARRENDER CASE SAID
THAT THE FULL FAITH AND CREDIT CLAUSE OF THE FEDERAL CONSTITUTIION
(ARTICLE IV, SECTION 1) IS NOT APPLICABLE TO A JUDGMENT OF A FOREIGN
COUNTRY. TO THE SAME EFFECT IS THE TEXT OF 27B C. J. S., DIVORCE, SEC.
328. AND IN THE CASE OF CANNON V. PHILLIPS (NEW YORK, 1965), 255 N. Y.
S. 2D 753, THE COURT SAID THAT A CALIFORNIA COURT COULD VOLUNTARILY
RECOGNIZE A MEXICAN DECREE OF DIVORCE UPON PRINCIPLES OF COMITY ALTHOUGH
NOT COMPELLED TO DO SO BY THE FULL FAITH AND CREDIT CLAUSE.
THE PRINCIPAL CHANGES IN RECENT YEARS IN THE JUDICIAL PRECEDENTS IN
THIS COUNTRY ON THE EFFECT OF MEXICAN DIVORCES APPEAR TO HAVE BEEN MADE
BY THE COURTS OF NEW YORK AND AMONG OTHER CASES WHICH YOU HAVE CITED IN
SUPPORT OF CAPTAIN WILTSHIRE'S CLAIM IS THE RECENT (JULY 9, 1965)
DECISION OF THE NEW YORK COURT OF APPEALS IN ROSENSTIEL V. ROSENSTIEL,
262 N. Y. S. 2D 86, IN WHICH IT WAS HELD THAT RECOGNITION SHOULD BE
GIVEN TO A DIVORCE WHICH IN CONFORMITY WITH MEXICAN LAW AND ON GROUNDS
NOT ACCEPTED IN NEW YORK WAS GRANTED BY A MEXICAN COURT THAT ACQUIRED
JURISDICTION OF THE PARTIES BY THE PLAINTIFF'S SIGNING A MUNICIPAL
REGISTER OF RESIDENTS AND THEN PHYSICALLY APPEARING BEFORE THE COURT AND
PRESENTING A PETITION FOR DIVORCE AND BY THE DEFENDANT'S APPEARING BY A
DULY AUTHORIZED ATTORNEY WHO FILED AN ANSWER WHEREIN THE DEFENDANT
SUBMITTED TO THE COURT'S JURISDICTION AND ADMITTED THE ALLEGATIONS OF
THE PETITION. HOWEVER, IT DOES NOT APPEAR THAT THE COURTS OF NEW YORK
WOULD RECOGNIZE AS VALID THE MEXICAN DIVORCE IN CAPTAIN WILTSHIRE'S CASE
SINCE HE APPARENTLY DID NOT APPEAR IN MEXICO IN PERSON OR BY A DULY
AUTHORIZED ATTORNEY TO FILE AN ANSWER AND SUBMIT TO THE MEXICAN COURT'S
JURISDICTION. YOUR ATTENTION IS INVITED TO THE TWO DISSENTING OPINIONS
IN THE ROSENSTIEL CASE, AND PARTICULARLY TO THE OPINION OF THE CHIEF
JUSTICE WHEREIN HE SAYS THAT "ALTHOUGH THERE IS A LINE OF LOWER COURT
DECISIONS IN THE STATE (NEW YORK) UPHOLDING THESE 'CHIHUAHUA' DECREES **
THEY ARE, SO WE ARE TOLD AND SO IT WOULD SEEM, REFUSED RECOGNITION
EVERYWHERE ELSE."
SINCE CAPTAIN WILTSHIRE'S SECOND MARRIAGE CEREMONY WAS PERFORMED IN
MARYLAND, WE THINK THE DECISIONS OF THE COURTS OF MARYLAND ARE MORE
PERTINENT TO HIS STATUS AND CLAIM THAN THE NEW YORK DECISIONS. IN THAT
CONNECTION, SEE 15 C. J. S., CONFLICT OF LAWS, SECTION 14C, PAGE 909.
WE HAVE CAREFULLY EXAMINED THE MARYLAND AND OTHER COURT CASES YOU HAVE
CITED BUT WHEN SUCH CASES ARE READ IN CONJUNCTION WITH THE SECOND APPEAL
IN BREWSTER V. BREWSTER (MD., 1955), 114 A. 2D 53, AND THE DECISION IN
GREGG V. GREGG (MD., 1959), 155 A. 2D 500, THEY DO NOT JUSTIFY A
CONCLUSION THAT THE COURTS OF MARYLAND WOULD UPHOLD THE VALIDITY OF THE
MEXICAN DECREE IN CAPTAIN WILTSHIRE'S CASE IF THE ISSUE OF SUCH VALIDITY
WERE SQUARELY PRESENTED FOR THEIR DECISION. NEITHER DO SUCH DECISIONS
SATISFY US THAT THE UNITED STATES COURT OF CLAIMS OR OTHER UNITED STATES
COURTS WOULD GIVE A JUDGMENT IN CAPTAIN WILTSHIRE'S FAVOR FOR THE
INCREASED ALLOWANCE HE IS SEEKING. HENCE, WE BELIEVE THAT THE DOUBT
RESPECTING HIS RIGHTS IS A MATTER FOR AN APPROPRIATE COURT (RATHER THAN
THIS OFFICE) TO RESOLVE, IT BEING A LONG-STANDING RULE OF THE ACCOUNTING
OFFICERS OF THE GOVERNMENT THAT THEY WILL NOT ALLOW A CLAIM AGAINST THE
UNITED STATES IF THERE IS A SUBSTANTIAL BASIS FOR DOUBT THAT A COURT OF
COMPETENT JURISDICTION WOULD ALLOW THE CLAIM. SEE LONGWILL V. UNITED
STATES, 17 CT. CL. 288; CHARLES V. UNITED STATES, 19 CT. CL. 316. IN
THAT CONNECTION, YOU WILL NOTE THAT IN ONE OF THE CASES YOU HAVE CITED,
YARBROUGH V. YARBROUGH (CT. CL. 1965), 341 F. 2D 621, THE COURT, AFTER
DISCUSSING THE FACTUAL SITUATION IN THE CASE AND THE CONFLICTING
MARRIAGES OF THE DECEASED, SAID -
"FACED WITH THIS MIXED-UP SITUATION THE CIVIL SERVICE COMMISSION HAS
WISELY REFAINED FROM MAKING ANY PAYMENTS TO ANY OF THE CLAIMANTS UNTIL
THEIR RIGHTS ARE CLARIFIED."
WE WISH TO MAKE CLEAR THAT WE MAKE NO CLAIM TO JURISDICTION TO
DECLARE CAPTAIN WILTSHIRE'S SECOND MARRIAGE INVALID. OUR CONCERN IS
THAT CLAIMS AGAINST THE UNITED STATES BE PROVED TO OUR SATISFACTION
BEFORE WE APPROVE THEM. THE QUESTION WE HAVE TO DECIDE IS WHETHER
CAPTAIN WILTSHIRE HAS ESTABLISHED THAT HE HAS A "SPOUSE" WITHIN THE
MEANING OF 37 U. S. C. 401. WE BELIEVE THAT IN THE LIGHT OF THE COURT
CASES WE HAVE EXAMINED, INCLUDING THOSE YOU HAVE CITED, HE HAS NOT
ESTABLISHED THAT HE HAS A SPOUSE FOR THE PURPOSE OF DRAWING INCREASED
BASIC ALLOWANCE FOR QUARTERS. IN HIS DISSENTING OPINION IN THE CASE OF
BRIGGS V. UNITED STATES, 116 CT. CL. 638, JUDGE WHITAKER INDICATED HIS
VIEW (CONCURRED IN BY CHIEF JUDGE JONES) THAT THE COURT OF CLAIMS SHOULD
TAKE A SIMILAR POSITION CONCERNING THE CLAIM THEN BEFORE IT. HIS WORDS
WERE (QUOTING FROM PAGE 658):
"I CANNOT AGREE THAT THE PLAINTIFF IS ENTITLED TO RECOVER ALLOWANCES
FOR A DEPENDENT AFTER THE TIME THE GOVERNMENT DISCONTINUED PAYMENTS TO
HIM THEREFOR. IN ORDER TO DO SO, HE MUST SHOW THAT HE HAD A LAWFUL
WIFE. THE STATUTE SAYS A MAN IS ENTITLED TO CERTAIN ALLOWANCES IF HE
HAD A LAWFUL WIFE. THE BURDEN IS ON HIM TO SHOW THAT HE HAD ONE. THE
GOVERNMENT IS NOT UNDER THE BURDEN OF SHOWING THAT HE DID NOT HAVE ONE."
WHILE WE RECOGNIZE THAT JUDGE WHITAKER'S OPINION IS A MINORITY
OPINION, WE QUOTE IT TO SHOW THAT IT WAS HIS VIEW THAT EVEN THE COURT
SHOULD TAKE A POSITION IN THE BRIGGS CASE SIMILAR TO OR COMPARABLE TO
THAT WHICH THIS OFFICE NOW TAKES IN CAPTAIN WILTSHIRE'S CASE. WHETHER
OR NOT THERE WAS A TENABLE BASIS FOR THE VIEW OF JUDGE WHITAKER AND
CHIEF JUDGE JONES IN THE BRIGGS CASE, AND WE THINK THERE WAS, THERE IS A
MUCH STRONGER BASIS FOR OUR POSITION IN CAPTAIN WILTSHIRE'S CASE, WHICH
POSITION, IN ESSENCE, IS THAT WE SHOULD WITHHOLD APPROVAL OF HIS CLAIM
UNTIL A COURT OF COMPETENT JURISDICTION HAS RESOLVED THE DOUBTS IN HIS
FAVOR.
WE ARE NOT UNSYMPATHETIC WITH CAPTAIN WILTSHIRE BUT OUR FUNCTION IS
TO DECIDE HIS CASE ACCORDING TO THE LAW AS WE UNDERSTAND IT. IN OUR
OPINION HE HAS NOT PROVED HIS CLAIM SINCE HE HAS NOT ESTABLISHED THAT HE
HAS A LAWFUL SPOUSE. ACCORDINGLY, WE HAVE NO PROPER ALTERNATIVE BUT TO
SUSTAIN OUR PRIOR DISALLOWANCE OF THE CLAIM.
B-157572, DEC. 7, 1965
TO LT. COL. LEO F. SULLIVAN, USAF, RETIRED:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 19, 1965, IN
CONNECTION WITH YOUR PROTEST TO THE AWARD OF CONTRACTS UNDER INVITATIONS
FOR BIDS NO. 04-666-65-64 AND 04-666-65-65, ISSUED BY BEALE AIR FORCE
BASE, CALIFORNIA.
THESE INVITATIONS WERE FOR FURNISHING ALL LABOR, SUPERINTENDENCE,
TRANSPORTATION, TOOLS AND EQUIPMENT TO PERFORM CUSTODIAL SERVICES IN
ACCORDANCE WITH THE ATTACHED SCHEDULE. THE INVITATIONS PROVIDED THAT
THE PROCUREMENTS WERE SET ASIDE 100 PERCENT FOR SMALL BUSINESS. BIDS
WERE OPENED ON JUNE 8, 1965, AND YOUR BID UNDER EACH INVITATION WAS LOW.
CLAUSE II OF INVITATION FOR BIDS NO. 04-666-65-65, ENTITLED "BIDDERS
QUALIFICATIONS," PROVIDED AS FOLLOWS:
"BIDDER'S QUALIFICATIONS: BIDDERS MUST BE REGULARLY ENGAGED IN THE
BUSINESS COVERED BY THESE SPECIFICATIONS AND POSSESSED OF SATISFACTORY
FINANCIAL AND TECHNICAL ABILITY, EQUIPMENT AND ORGANIZATION TO INSURE A
SATISFACTORY COMPLETION OF THE CONTRACT, AND MUST HAVE ESTABLISHED A
SATISFACTORY RECORD IN THE PAST FOR COMPLETION OF CONTRACTS OF SIMILAR
CHARACTER AND EXTENT. THE CONTRACTING OFFICER SHALL BE THE JUDGE OF THE
FACTS SUBMITTED IN SUPPORT OF BIDDERS CLAIM AS TO COMPETENCY. THE FACT
THAT DRAWINGS AND SPECIFICATIONS HAVE BEEN FURNISHED TO BIDDERS WILL NOT
LIMIT THE GOVERNMENT'S RIGHT TO JUDGE AS TO COMPETENCY AFTER BIDS HAVE
BEEN RECEIVED.'
CLAUSE G OF INVITATION FOR BIDS NO. 04-666-65-64 WAS THE SAME AS THE
PROVISION IN CLAUSE H QUOTED ABOVE.
ON JUNE 15, 1965, THE PROCURING OFFICE ADVISED THE SMALL BUSINESS
ADMINISTRATION AT MCCLELLAN AIR FORCE BASE, CALIFORNIA, THAT YOU WERE
CONSIDERED AS NONRESPONSIBLE PURSUANT TO ARMED SERVICES PROCUREMENT
REGULATION SECTION 1-903.1 (III). THIS REGULATION PROVIDES THAT A
PROSPECTIVE CONTRACTOR MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE.
ON JUNE 16, 1965, THE PROCURING OFFICE REQUESTED A FACILITY
CAPABILITY REPORT ON YOU FROM THE SAN FRANCISCO AIR PROCUREMENT
DISTRICT, PALO ALTO, CALIFORNIA. IN RESPONSE TO THIS REQUEST THE
PROCURING OFFICE WAS ADVISED BY A TELEGRAM DATED JUNE 17, 1965, THAT YOU
HAD NO PREVIOUS EXPERIENCE ON NON-PERSONAL SERVICE CONTRACTS AND THAT
YOU WERE EXPERIENCING DIFFICULTY IN OBTAINING AN ADEQUATE LINE OF
CREDIT. IT WAS RECOMMENDED THAT YOUR BID BE DECLARED NONRESPONSIVE FOR
FAILING TO COMPLY WITH THE REQUIREMENTS OF CLAUSES G AND H AND THAT THE
REQUEST FOR THE FCR BE
WITHDRAWN.
THE SAN FRANCISCO REGIONAL OFFICE AT SBA ADVISED THE PROCURING
ACTIVITY ON JUNE 21, 1965, THAT YOUR BID WAS NONRESPONSIVE SINCE YOU
COULD NOT COMPLY WITH THE EXPERIENCE REQUIREMENTS OF CLAUSES G AND H AND
THAT SBA WOULD THEREFORE NOT TAKE ANY FURTHER ACTION. ON JUNE 18, 1965,
YOU WERE ADVISED BY THE PROCURING ACTIVITY THAT YOUR BID WAS REJECTED AS
NONRESPONSIVE FOR FAILING TO COMPLY WITH THE REQUIREMENTS OF CLAUSES G
AND H. ON AUGUST 19, 1965, YOU PROTECTED THIS DETERMINATION TO OUR
OFFICE.
A CONTRACT UNDER INVITATION FOR BIDS NO. 04-666-65-65, WAS AWARDED TO
PACIFIC COAST UTILITIES SERVICE, INCORPORATED, ON JUNE 28, 1965, AND A
CONTRACT UNDER INVITATION FOR BIDS NO. 04-666-65-64, WAS AWARDED TO THE
AEROTRONICS CORPORATION ON JUNE 29, 1965. THESE CONTRACTS ARE FOR THE
PERIOD FROM JULY 1, 1965 THROUGH JUNE 30, 1966.
IT IS OUR VIEW THAT THE REQUIREMENTS IN CLAUSES G AND H OF THE
INSTANT INVITATIONS INVOLVE FACTORS WHICH ARE TO BE CONSIDERED IN
DETERMINING THE RESPONSIBILITY OF A BIDDER AND THEREFORE INVOLVE HIS
CAPACITY AND CREDIT. SEE 40 COMP. GEN. 106. THE SMALL BUSINESS
ADMINISTRATION HAS THE STATUTORY AUTHORITY TO CERTIFY YOUR COMPETENCY IN
REGARD TO CAPACITY AND CREDIT. SEE ARMED SERVICES PROCUREMENT
REGULATION SECTION 1-705.4 (A). THIS OFFICE, OF COURSE, IS NOT MAKING
ANY DECISION REGARDING YOUR RESPONSIBILITY BUT WE DO FIND THAT IT WAS
ERRONEOUS TO REJECT YOUR BID AS NONRESPONSIVE ON THE BASIS THAT YOU DID
NOT COMPLY WITH THE REQUIREMENTS OF CLAUSES G AND H. IF AN AWARD TO YOU
WERE OTHERWISE PROPER, THE VALIDITY OF THE AWARDS TO PACIFIC COAST
UTILITIES SERVICE AND AEROTRONICS WOULD DEPEND ON THE DETERMINATION OF
SBA REGARDING YOUR CAPACITY AND CREDIT. SEE 40 COMP. GEN. 106;
B-137471, OCTOBER 24, 1958. HOWEVER, EVEN IF YOU WERE ISSUED A
CERTIFICATE OF COMPETENCY FOR THE INSTANT PROCUREMENTS AT THIS TIME,
CANCELLATION OF THE AWARDS TO
PACIFIC COAST UTILITIES SERVICE AND AEROTRONICS, WHICH APPARENTLY
WERE MADE IN GOOD FAITH, WOULD NOT BE IN THE BEST INTEREST OF THE UNITED
STATES. CONSEQUENTLY, WHILE WE FEEL THAT THE MANNER IN WHICH YOUR BID
WAS REJECTED WAS UNFORTUNATE, WE WILL NOT RECOMMEND ANY FURTHER ACTION
IN REGARD TO THIS MATTER.
THE DEPARTMENT OF THE AIR FORCE AGREES WITH OUR FINDINGS IN THIS
MATTER AND HAS ADVISED THAT CORRECTIVE ACTION IS BEING TAKEN TO AVOID A
REPETITION OF THIS SITUATION IN FUTURE PROCUREMENTS.
B-157743, DEC. 7, 1965
TO HONEYWELL, INC. :
REFERENCE IS MADE TO YOUR PROTEST AGAINST AWARD OF A CONTRACT TO
JAMES G. BIDDLE COMPANY FOR ITEM 2 UNDER INVITATION FOR BIDS NO. AMC
(A) 18-064-66-9, ISSUED BY THE UNITED STATES BIOLOGICAL LABORATORIES,
FORT DETRICK, MARYLAND.
THE ITEM IN QUESTION WAS DESCRIBED IN THE IFB AS FOLLOWS:
"CALIBRATION BRIDGE, DIRECT READING, RATIO SET -
RANGE: ANY RATIO OF RESISTANCE FROM 1 TO 2,000,000. ALSO WITH
INTERNAL COMPARISON FEATURE OF 50 TO 1 AND 10 TO 1. A COMBINED UNIT FOR
UNIVERSAL AND DIRECT READING RATIOS.
TOTAL NOMINAL RESISTENCE: 2111.110 OHMS AS A UNIVERSAL RATIO SET AND
2000 OHMS AS A DIRECT READING RATIO SET.
ADJUSTABLE RESISTANCE VALUES: 20 TIMES 100, 10 TIMES 10, TEN TIMES
1, 10 TIMES 0.1, 10 TIMES 0.01, AND 10 TIMES .001 OHMS.
ACCURACY: LIMITS OF ERROR (UNIVERSAL RATIO SET) 0.002 PERCENT OR
.002 OHMS WHICHEVER IS LARGER FOR ERROR OF DIFFERENCE BETWEEN ANY TWO
READINGS. ERROR ALL DIALS SET AT ZERO .004 OHMS MAX. LIMITS OF ERROR
(AS 1 TO 1 DIRECT READING RATIO SET) 4 PARTS PER MILLION IF UNKNOWN IS
WITHIN 0.1 PERCENT OF STANDARD, ALL AT 25 DEGREES C.
VOLTAGE: 2 TO 4 V DC UP TO 50V IF PERMITTED--- OF APPARATUS UNDER
TEST.
SWITCHES: LOCATED UNDER PANEL SURFACE IN DUST PROOF ENCLOSURE.
CONTACT RESISTANCE UNDER .0004 OHMS.
RESISTORS: LOCATED IN THERMAL EQUALIZING CHAMBER.
"CASE: TO PROVIDE ELECTROSTATIC SHIELDING.
"MODEL: HONEYWELL, NO. 1407 OR EQUAL.' "
IN ADDITION TO A DESCRIPTIVE DATA REQUIREMENT, THE IFB CONTAINED, IN
ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1206.3
AND AS PARAGRAPH 34 OF THE TERMS AND CONDITIONS OF THE INVITATION, A
BRAND NAME OR EQUAL CLAUSE READING IN PART, AS FOLLOWS:
"/A) IF ITEMS CALLED FOR BY THIS INVITATION FOR BIDS HAVE BEEN
IDENTIFIED IN THE SCHEDULE BY A "BRAND NAME OR EQUAL" DESCRIPTION, SUCH
IDENTIFICATION IS INTENDED TO BE DESCRIPTIVE, BUT NOT RESTRICTIVE, AND
IS TO INDICATE THE QUALITY AND CHARACTERISTICS OF PRODUCTS THAT WILL BE
SATISFACTORY. BIDS OFFERING "EQUAL" PRODUCTS WILL BE CONSIDERED FOR
AWARD IF SUCH PRODUCTS ARE CLEARLY IDENTIFIED IN THE BIDS AND ARE
DETERMINED BY THE GOVERNMENT TO BE EQUAL IN ALL MATERIAL RESPECTS TO THE
BRAND NAME PRODUCTS REFERENCED IN THE INVITATION FOR BIDS.
"/C) (1) IF THE BIDDER PROPOSES TO FURNISH AN "EQUAL" PRODUCT, THE
BRAND NAME, IF ANY, OF THE PRODUCT TO BE FURNISHED SHALL BE INSERTED IN
THE SPACE PROVIDED IN THE INVITATION FOR BIDS, OR SUCH PRODUCT SHALL BE
OTHERWISE CLEARLY IDENTIFIED IN THE BID. THE EVALUATION OF BIDS AND THE
DETERMINATION AS TO EQUALITY OF THE PRODUCT OFFERED SHALL BE THE
RESPONSIBILITY OF THE GOVERNMENT AND WILL BE BASED ON INFORMATION
FURNISHED BY THE BIDDER OR IDENTIFIED IN HIS BID, AS WELL AS OTHER
INFORMATION REASONABLY AVAILABLE TO THE PURCHASING ACTIVITY. CAUTION TO
BIDDERS. THE PURCHASING ACTIVITY IS NOT RESPONSIBLE FOR LOCATING OR
SECURING ANY INFORMATION WHICH IS NOT IDENTIFIED IN THE BID AND
REASONABLY AVAILABLE TO THE PURCHASING ACTIVITY. ACCORDINGLY, TO INSURE
THAT SUFFICIENT INFORMATION IS AVAILABLE, THE BIDDER MUST FURNISH AS A
PART OF HIS BID ALL DESCRIPTIVE MATERIAL (SUCH AS CUTS, ILLUSTRATIONS,
DRAWINGS, OR OTHER INFORMATION) NECESSARY FOR THE PURCHASING ACTIVITY TO
(I) DETERMINE WHETHER THE PRODUCT OFFERED MEETS THE REQUIREMENTS OF THE
INVITATION FOR BIDS AND (II) ESTABLISH EXACTLY WHAT THE BIDDER PROPOSES
TO FURNISH AND WHAT THE GOVERNMENT WOULD BE BINDING ITSELF TO PURCHASE
BY MAKING AN AWARD. THE INFORMATION FURNISHED MAY INCLUDE SPECIFIC
REFERENCES TO INFORMATION PREVIOUSLY FURNISHED OR TO INFORMATION
OTHERWISE AVAILABLE TO THE PURCHASING ACTIVITY.
"/2) IF THE BIDDER PROPOSES TO MODIFY A PRODUCT SO AS TO MAKE IT
CONFORM TO THE REQUIREMENTS OF THE INVITATION FOR BIDS, HE SHALL (I)
INCLUDE IN HIS BID A CLEAR DESCRIPTION OF SUCH PROPOSED MODIFICATIONS
AND (II) CLEARLY MARK ANY DESCRIPTIVE MATERIAL TO SHOW THE PROPOSED
MODIFICATIONS.
"/3) MODIFICATIONS PROPOSED AFTER BID OPENING TO MAKE A PRODUCT
CONFORM TO A BRAND NAME PRODUCT REFERENCED IN THE INVITATION FOR BIDS
WILL NOT BE CONSIDERED.'
BIDS WERE OPENED ON AUGUST 17, AS SCHEDULED. OF THE THREE BIDS
SUBMITTED, BIDDLE'S BID, QUOTING PRICES OF $705 ON ITEM 1, A PRECISION
POTENTIOMETER, AND $2160 ON ITEM 2, WAS LOW AS TO BOTH ITEMS.
ACCORDINGLY, UPON DETERMINATION BY THE TECHNICAL EVALUATORS AT THE
PROCURING ACTIVITY THAT BIDDLE WAS RESPONSIVE TO THE GOVERNMENT'S
REQUIREMENTS, AWARD WAS MADE TO BIDDLE ON AUGUST 21. IT IS OUR
UNDERSTANDING THAT BIDDLE HAS DELIVERED THE ITEMS TO THE PROCURING
ACTIVITY, AND INSPECTION WILL BE PERFORMED SHORTLY, AS REQUIRED BY
ARTICLE 5 OF THE GENERAL PROVISIONS (SUPPLY CONTRACT), STANDARD FORM 32,
BEFORE ACCEPTANCE OF THE ITEMS BY THE GOVERNMENT.
IN YOUR LETTER DATED SEPTEMBER 23, ADDRESSED TO THE PROCURING
ACTIVITY, YOU STATE THAT THE RATIO SET OFFERED BY BIDDLE IN LIEU OF THE
HONEYWELL MODEL, AS DESCRIBED IN THE LITERATURE INCLUDED IN BIDDLE'S
BID, DOES NOT COMPLY WITH THE SPECIFICATIONS AND, THEREFORE, SHOULD BE
REJECTED. IN A LETTER OF OCTOBER 5, ALSO ADDRESSED TO THE PROCURING
ACTIVITY, YOU MAKE THE FOLLOWING STATEMENTS:
"THE SPECIFICATIONS FOR ITEM 2 UNDER THE ABOVE IFB READ IN PART AS
FOLLOWS:
"THE MODEL 1407 UNIVERSAL/DIRECT READING RATIO JOB IS A UNIQUE
COMBINATION INSTRUMENT CONSISTING OF A 6-DIAL UNIVERSAL RATIO SET WITH
APPROPRIATE ADDITIONAL CIRCUIT COMPONENTS TO FACILITATE ITS USE AS A
HIGH PERFORMANCE DIRECT READING RATIO SET. THE UNIVERSAL RATIO SET
CONTAINS SIX DIALS, GIVING ONE PART PER MILLION RESOLUTION FOR ANY RATIO
FROM 1 TO 2,000,000. THIS ENABLES CALIBRATING SUCH DEVICES AS
POTENTIOMETERS AND ADD VALUE RESISTORS.
"THE ADDITION OF THE APPROPRIATE TAPS AND RESISTORS ENABLES THE
OPERATOR TO UTILIZE THIS DEVICE AS A DIRECT READING RATIO SET FOR THE
COMPARISON OF RESISTORS WHOSE NOMINAL VALUES ARE THE SAME. IT ALSO
PROVIDES PRECISE INTER-COMPARISON OF RESISTORS WHOSE RATIO IS 5:1 OR
10:1.
"LIMIT OF ERROR (AS A DIRECT READING RATIO SET). 4 PARTS PER MILLION
IF UNKNOWN IS WITHIN 0.1 PERCENT OF STANDARD.
"THE MODEL 603002 UNIVERSAL RATIO SET OFFERED BY THE JAMES G. BIDDLE
COMPANY AND DESCRIBED IN THEIR BULLETIN 60-20 MAKES NO PROVISION
WHATEVER FOR THE "DIRECT READING RATIO SET" FEATURE.'
THE BULLETIN SUBMITTED BY BIDDLE WITH ITS BID OF AUGUST 4, DESCRIBING
THE SIX DIAL UNIVERSAL RATIO SET OFFERED AS ITEM 2, READS, IN PART, AS
FOLLOWS:
"CATALOG 603002 SIX DIAL UNIVERSAL RATIO SET IS ONE OF THE MOST
ESSENTIAL AS WELL AS MOST VERSATILE D.C. MEASURING INSTRUMENTS IN A
STANDARDIZING LABORATORY. THIS RATIO SET CAN BE USED FOR THE PRECISE
CALIBRATION AND CERTIFICATION OF SUCH PRECISION INSTRUMENTS AS
POTENTIOMETERS, VOLTAGE DIVIDERS AND RESISTANCE STANDARDS INCLUDING ODD
VALUE RESISTORS. THE RATIO ACT CAN ALSO BE USED FOR PRECISE RATIO
MEASUREMENTS.
"THE SIX DIAL UNIVERSAL RATIO SET IS EQUIVALENT TO A LONG SLIDEWIRE
WITH A TERMINAL RESISTANCE OF 2,111.110 OHMS AND WITH A MOVABLE CONTACT
THAT MAY BE SET AT ANY POINT OF THE 2,111.110 OHMS TO AN INCREMENT OF
0.001 OHM.
"SPECIAL FEATURES--- THIS RATIO SET HAS BEEN UNIQUELY DESIGNED TO
GIVE OPTIMUM ACCURACY AND PERFORMANCE AS WELL AS TO PROVIDE EASY READING
OF RATIOS. A FEW OF THESE FEATURES ARE:
"ALL RESISTORS AND SWITCHES ARE ENCLOSED IN A THERMAL EQUALIZING
CHAMBER WITH ADDITIONAL LINING UTILIZED INSIDE THE CASE. ALL PUSH KEY
CONTACTS ARE GOLD.
"ELECTROSTATIC SHIELDING IS PROVIDED BY THE ALUMINUM CASE AND PANEL.
"DIRECT "IN LINE" READ-OUT IS OBTAINED BY A UNIQUE ARRANGEMENT OF THE
DIALS.
"RANGE--- SIX ADJUSTABLE DIALS, GIVING STEPS OF 20 TIMES 100 OHMS
PLUS 10 (10 PLUS 1 PLUS 0.1 PLUS 0.01 PLUS 0.001) OHMS. THE RESISTANCE
IS CONSTANT AT 2,111.110 OHMS FOR ALL SETTINGS OF THE DIALS.
"RESOLUTION--- 0.001 OHM STEPS OF 1/2 PART PER MILLION (0.00005
PERCENT) OF THE TOTAL INPUT RESISTANCE.
"LINEARITY--- PLUS OR MINUS 0.0001 PERCENT OR 1 PART PER MILLION OF
THE TOTAL INPUT RESISTANCE.
"LIMIT OR ERROR--- PLUS OR MINUS 0.001 PERCENT OR 0.002 OHM WHICHEVER
IS GREATER. ALL RESISTORS UTILIZE SPECIALLY SELECTED RESISTANCE WIRE
AND HAVE BEEN THOROUGHLY AGED FOR HIGHEST STABILITY. EACH RATIO SET
FURNISHED WITH BIDDLE-GRAY CALIBRATION GIVING READINGS AT 23 DEGREES C
TRACEABLE TO NATIONAL BUREAU OF STANDARDS.'
BY LETTER DATED AUGUST 9, EIGHT DAYS PRIOR TO BID OPENING, BIDDLE
REQUESTED THE PROCURING ACTIVITY TO ADD TO ITS BID THE FOLLOWING
STATEMENT:
"REFERENCE ITEM 2 OF SUBJECT IFB:
WE WISH TO ADVISE THAT THE NUMBER 603002 WE ARE OFFERING WILL FULLY
MEET THE SPECIFICATIONS AS CALLED FOR ON PAGE 12 AND 13 OF THE
INVITATION.'
THE AMC REPORT SHOWS THAT BASED ON THE LITERATURE ORIGINALLY
FURNISHED BY BIDDLE AND THE LETTER OF AUGUST 9, TOGETHER WITH THE FACT
THAT BIDDLE TOOK NO EXCEPTIONS TO ANY OF THE IFB REQUIREMENTS, THE
TECHNICAL EVALUATORS CONCLUDED THAT BIDDLE WAS OFFERING AN ACCEPTABLE
ITEM RESPONSIVE TO THE PROCUREMENT NEEDS. IN THIS CONNECTION, IT IS
FURTHER STATED THAT IN THE OPINION OF THE TECHNICAL EVALUATORS, THE ITEM
IS NOT A NORMAL OFF-THE-SHELF ITEM BUT IS, RATHER, ONE THAT IS SPECIALLY
MANUFACTURED OR FABRICATED FOR A PARTICULAR PROCUREMENT; THAT THE
INSTRUMENTS ARE APPARENTLY MODIFIED TO MEET THE NEEDS OF THE PURCHASER;
AND THAT APPARENTLY BIDDLE HAS UNDERTAKEN THE MODIFICATION OF ITS OWN
INSTRUMENT TO MEET THE SALIENT FEATURES SET FORTH IN THE IFB. THE
CONTRACTING OFFICER'S STATEMENT INDICATES THAT THE AWARD WAS MADE ON THE
ASSUMPTION THAT THE LOW BID WAS RESPONSIVE, AND SINCE BIDDLE TOOK NO
EXCEPTIONS TO THE SPECIFICATIONS, SUBMITTED DESCRIPTIVE LITERATURE, AND
SUPPLEMENTED ITS BID WITH THE STATEMENT THAT THE ITEM WOULD FULLY COMPLY
WITH THE SPECIFICATIONS, THE CONTRACTING OFFICER HAD NO ALTERNATIVE BUT
TO ACCEPT BIDDLE'S LOW BID.
THE PROCURING ACTIVITY CONCEDES THAT THE BULLETIN SUBMITTED BY BIDDLE
DESCRIBING ITS INSTRUMENT DOES NOT SHOW THAT THE ITEM MEETS ALL THE
SALIENT REQUIREMENTS OF THE BRAND NAME ITEM SET FORTH IN THE IFB.
HOWEVER, IT IS THE POSITION OF THE PROCUREMENT OFFICIALS THAT THE
STATEMENT IN BIDDLE'S LETTER OF AUGUST 9, SUBMITTED BEFORE BID OPENING
AS A PART OF THE BID, ASSURING THAT THE ITEM WOULD FULLY COMPLY WITH THE
IFB SPECIFICATIONS, REMEDIES ANY DEFICIENCIES IN THE DESCRIPTIVE
BULLETIN. HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND, CONCURS
WITH THE CONTRACTING OFFICER'S FINDING THAT THE BID WAS RESPONSIVE AND,
THEREFORE, RECOMMENDS THAT THE PROTEST BE DENIED.
ASPR 1-1206.4 (A) PROVIDES AS FOLLOWS:
"/A) BIDS OFFERING PRODUCTS WHICH DIFFER FROM BRAND NAME PRODUCTS
REFERENCED IN A "BRAND NAME OR EQUAL" PURCHASE DESCRIPTION SHALL BE
CONSIDERED FOR AWARD WHERE THE CONTRACTING OFFICER DETERMINES IN
ACCORDANCE WITH THE TERMS OF THE CLAUSE IN 1-1206.3 (B) THAT THE OFFERED
PRODUCTS ARE EQUAL IN ALL MATERIAL RESPECTS TO THE PRODUCTS REFERENCED.
BIDS SHALL NOT BE REJECTED BECAUSE OF MINOR DIFFERENCES IN DESIGN,
CONSTRUCTION, OR FEATURES WHICH DO NOT AFFECT THE SUITABILITY OF THE
PRODUCTS FOR THEIR INTENDED USE.'
WHILE A "BRAND NAME" DESIGNATION IS INTENDED TO BE DESCRIPTIVE AND
MUST BE SO INTERPRETED, SPECIFICATIONS SPELLING OUT ESSENTIAL
CHARACTERISTICS TO MEET THE NEEDS OF THE GOVERNMENT MUST BE STRICTLY
MET. ASPR 1-1206.2 (B).
ON THE FACTS OF RECORD, IT IS OUR VIEW THAT THE BID SUBMITTED BY
BIDDLE, INCLUDING THE LETTER OF AUGUST 9 CONTAINING THE BLANKET OFFER TO
MEET ALL OF THE SPECIFICATIONS, WAS NOT RESPONSIVE TO THE IFB IN THAT IT
FAILED TO INDICATE THAT IT WOULD MEET ALL OF THE SALIENT REQUIREMENTS OF
THE BRAND-NAME ITEM AS SET FORTH IN THE IFB DESCRIPTION. IF AS THE
TECHNICAL EVALUATOR ASSUMED, BIDDLE INTENDED TO MODIFY THE ITEM
DESCRIBED IN ITS BID LITERATURE TO MEET THE SPECIFIED REQUIREMENTS, IT
WAS REQUIRED BY THE TERMS OF PARAGRAPH 34 (C) (2) OF THE TERMS AND
CONDITIONS OF THE INVITATION TO INCLUDE IN ITS BID A CLEAR DESCRIPTION
OF THE PROPOSED MODIFICATIONS AND TO CLEARLY MARK DESCRIPTIVE DATA
SHOWING SUCH MODIFICATIONS. THIS, BIDDLE FAILED TO DO. HAD THE MATTER
BEEN BROUGHT TO OUR ATTENTION BEFORE THE AWARD, WE ARE OF THE OPINION WE
WOULD HAVE ADVISED THE CONTRACTING AGENCY THAT BIDDLE'S BID WAS
NONRESPONSIVE AND SHOULD BE REJECTED. HOWEVER, IT IS TO BE NOTED THAT
BIDDLE TOOK NO EXCEPTION TO THE IFB REQUIREMENTS, THAT THE AWARD WAS
MADE IN GOOD FAITH, AND THAT THE ITEM DELIVERED BY BIDDLE WILL NOT BE
ACCEPTED BY THE PROCURING ACTIVITY UNTIL AFTER IT HAS BEEN INSPECTED FOR
COMPLIANCE WITH THE SPECIFICATIONS. IN VIEW OF THE FOREGOING, IT IS OUR
OPINION THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED BY
CANCELLING THE CONTRACT AWARDED TO BIDDLE, 43 COMP. GEN. 761, AND YOUR
PROTEST IS THEREFORE DENIED.
B-158008, DEC. 7, 1965
TO MR. LORENZO P. GUINTADCAN:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 22, 1965, APPEALING OUR
DISALLOWANCE OF YOUR CLAIM FOR SEVERANCE PAY INCIDENT TO YOUR EMPLOYMENT
WITH THE UNITED STATES AIR FORCE, AT GUAM, WHICH WAS TERMINATED BY A
REDUCTION IN FORCE ON JUNE 30, 1964.
THE TERMS OF YOUR EMPLOYMENT WERE STATED IN THE UNITED STATES---
PHILIPPINE 1947 OFF-SHORE AGREEMENT, BUT A SEVERANCE PAY PLAN FOR
FILIPINOS EMPLOYED OUTSIDE THE PHILIPPINES BY THE UNITED STATES
GOVERNMENT WAS NOT MADE A PART OF THAT COMPENSATION PLAN UNTIL DECEMBER
3, 1964. THE SEVERANCE PAY PLAN WAS THE SUBJECT OF A LETTER DATED
DECEMBER 12, 1964, FROM HEADQUARTERS, UNITED STATES ARMY, PACIFIC, APO
958, SAN FRANCISCO, CALIFORNIA, REFERENCE GPPE-CP, TO FOUR COMMANDING
GENERALS OF THE UNITED STATES ARMY IN THE PACIFIC AREA, AND WAS PASSED
TO THE JOINT COMMANDS FROM CINCPAC BY MESSAGE DTG 090330Z, DECEMBER
1964. SUBPARAGRAPH 1 OF THE LETTER STATES THAT "ONLY THOSE EMPLOYEES ON
THE ROLLS ON THE EFFECTIVE DATE * * * WILL BE ELIGIBLE FOR BENEFITS.'
THAT EFFECTIVE DATE APPLIES IN ALL CASES, INCLUDING THOSE IN WHICH THE
SEPARATION OF THE EMPLOYEE PRIOR TO DECEMBER 3, 1964, WAS FOR REDUCTION
IN FORCE, ILLNESS, OR DISABILITY.
ACCORDINGLY, AS YOUR EMPLOYMENT WAS TERMINATED ON JUNE 30, 1964, AND
THE EFFECTIVE DATE OF THE PLAN WAS NOT UNTIL DECEMBER 3, 1964, THERE IS
NO LEGAL BASIS FOR ALLOWING YOUR CLAIM FOR SEVERANCE PAY. THE
DISALLOWANCE OF YOUR CLAIM, THEREFORE, MUST BE AND IS SUSTAINED.
B-156959, DEC. 6, 1965
TO ALL AMERICAN ENGINEERING COMPANY:
BY LETTER DATED JUNE 4, 1965, WITH ENCLOSURES, AND SUBSEQUENT
CORRESPONDENCE, YOU PROTESTED AGAINST THE USE OF YOUR PROPRIETARY
DRAWINGS BY THE DEPARTMENT OF THE AIR FORCE IN SOLICITING OFFERS UNDER
REQUEST FOR PROPOSALS NO. 65-08561, ISSUED BY THE SACRAMENTO AIR
MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA.
THE REQUEST COVERED A REQUIREMENT FOR A MAXIMUM AND MINIMUM QUANTITY
OF RETAINER HOOKS FOR AERIAL RECOVERY SYSTEMS IN ACCORDANCE WITH DRAWING
LIST NO. 65C40533. FOUR PROPOSALS WERE RECEIVED ON JUNE 1, 1965, AND IT
APPEARED THAT ADVANCED MATERIALS TECHNOLOGY, INC., SUBMITTED THE LOWEST
OFFER IN THE AMOUNT OF $13,530. YOUR OFFER WAS THE HIGHEST RECEIVED IN
THE AMOUNT OF $51,395.85. THE LOW OFFER WAS ACCEPTED ON JUNE 4, 1965.
YOU CONTEND, IN EFFECT, THAT THE AWARD WAS IMPROPER AND SHOULD BE
CANCELED SINCE IT CONSTITUTED AN UNWARRANTED USURPATION AND/OR
CONFISCATION OF YOUR PROPERTY WITHOUT JUST COMPENSATION, PARTICULARLY
BECAUSE THE END ITEM AND THE DRAWINGS THEREOF ARE PROPRIETARY TO YOUR
COMPANY. THIS PROTEST WAS THE SUBJECT OF AN EXHAUSTIVE INVESTIGATION BY
THE DEPARTMENT AND, BASED UPON THE FACTS DISCLOSED BY SUCH
INVESTIGATION, THE DEPARTMENT HAS RECOMMENDED TO OUR OFFICE THAT THE
PROTEST BE DENIED. UPON REVIEW OF THE RECORD BEFORE US, WE FIND NO
LEGAL BASIS TO QUESTION THE ACTIONS TAKEN BY THE DEPARTMENT WHICH
CULMINATED IN THE AWARD MADE TO ADVANCED MATERIALS TECHNOLOGY, INC.
THE RECORD BEFORE US SHOWS THAT YOUR CLAIM THAT THE INVOLVED DRAWINGS
WERE PROPRIETARY TO YOUR COMPANY WAS THE SUBJECT OF CORRESPONDENCE
BETWEEN YOUR COMPANY AND THE LOCKHEED MISSILES AND SPACE COMPANY.
LOCKHEED WAS A PRIME COST-PLUS-A-FIXED-FEE CONTRACTOR WITH THE AIR
FORCE, AND IT APPEARS THAT YOU WERE A SUBCONTRACTOR TO LOCKHEED DURING
1963 AND 1964. IN THAT CORRESPONDENCE WITH LOCKHEED, YOU MAKE THE POINT
THAT THE ORIGINAL DESIGN OF THE RETRIEVAL MECHANISM WAS PAID FOR AND
FUNDED BY YOUR COMPANY AND WAS NOT DEVELOPED OR PAID FOR WITH GOVERNMENT
FUNDS.
YOUR CLAIM THAT THE RETRIEVAL MECHANISM AND ITS DRAWING ARE
PROPRIETARY TO YOUR FIRM MUST BE RESOLVED IN THE LIGHT OF THE CONDITIONS
UNDER WHICH THE DATA WAS FURNISHED BY YOU AND THE PERTINENT CONTRACTUAL
RELATIONSHIP BETWEEN YOU AND LOCKHEED WITH REFERENCE TO SUCH END ITEM
AND DATA. UNDER DATE OF DECEMBER 21, 1960, LOCKHEED ENTERED INTO A
COST-PLUS-A-FIXED-FEE SUBCONTRACT (NO. 28-623, AS AMENDED) WITH YOUR
FIRM UNDER ITS PRIME CONTRACT NO. AF 04/647/-563. UNDER YOUR
SUBCONTRACT, YOU WERE REQUIRED TO "CONDUCT A PROGRAM OF DESIGN
DEVELOPMENT, TEST, MANUFACTURE COORDINATION AND DELIVERY RESULTING IN
THE DELIVERY TO LMSD (LOCKHEED) OF ONE PROTOTYPE AND SIX PRODUCTION
UNITS OF AN AIR-TO-AIR RECOVERY SYSTEM FOR THE RECOVERY OF A DESCENDING
PARACHUTE SUSPENDED CAPSULE * * *.' SPECIFICATION NO. 1069029 C TO YOUR
SUBCONTRACT REQUIRED YOU TO FURNISH
DESIGN SPECIFICATIONS WHEREIN DESIGN OF THE EQUIPMENT IS ESTABLISHED
BY THE APPROVED ENGINEERING DRAWINGS COVERING THE ITEM AND ALSO A
COMPLETE SET OF DRAWINGS AND DRAWING INDEX. IT WAS FURTHER PROVIDED
THAT THE SPECIFICATIONS AND DRAWINGS "WILL BE USED FOR PROCUREMENT OF
ADDITIONAL EQUIPMENT," AND THAT THE "UNITED STATES AIR FORCE WILL HAVE
ALL PROPRIETARY AND REPRODUCTION RIGHTS TO THIS DATA, AND MANUFACTURING
RIGHTS FOR THE EQUIPMENT.'
ARTICLE 37 OF YOUR SUBCONTRACT PROVIDED WITH RESPECT TO DATA:
"A. THE TERM "SUBJECT DATA" AS USED HEREIN INCLUDES WRITINGS, SOUND
RECORDINGS, PICTORIAL REPRODUCTIONS, DRAWINGS OR OTHER GRAPHICAL
REPRESENTATIONS, AND WORKS OF ANY SIMILAR NATURE (WHETHER OR NOT
COPYRIGHTED) WHICH ARE SPECIFIED TO BE DELIVERED UNDER THIS SUBCONTRACT.
THE TERM DOES NOT INCLUDE FINANCIAL REPORTS, COST ANALYSIS, AND OTHER
INFORMATION INCIDENTAL TO CONTRACT ADMINISTRATION.
"B. SUBCONTRACTOR AGREES TO AND DOES HEREBY GRANT TO THE GOVERNMENT,
AND TO ITS OFFICERS, AGENTS, AND EMPLOYEES ACTING WITHIN THE SCOPE OF
THEIR OFFICIAL DUTIES, A ROYALTY-FREE, NONEXCLUSIVE AND IRREVOCABLE
LICENSE THROUGHOUT THE WORLD FOR GOVERNMENT PURPOSES TO PUBLISH,
TRANSLATE, REPRODUCE, DELIVER, PERFORM, DISPOSE OF, AND TO AUTHORIZE
OTHERS SO TO DO, ALL SUBJECT DATA NOW OR HEREAFTER COVERED BY COPYRIGHT;
PROVIDED, THAT WITH RESPECT TO THE SUBJECT DATA NOW OR HEREAFTER
COVERED BY COPYRIGHT AND NOT ORIGINATED IN THE PERFORMANCE OF THIS
SUBCONTRACT, SUCH LICENSE SHALL BE ONLY TO THE EXTENT THAT THE
SUBCONTRACTOR, ITS EMPLOYEES, OR ANY INDIVIDUAL OR CONCERN SPECIFICALLY
EMPLOYED OR ASSIGNED BY SUBCONTRACTOR TO ORIGINATE AND PREPARE SUCH DATA
UNDER THIS SUBCONTRACT, NOW HAS, OR PRIOR TO COMPLETION OF FINAL
SETTLEMENT OF THIS SUBCONTRACT MAY ACQUIRE, THE RIGHT TO GRANT SUCH
LICENSE WITHOUT BECOMING LIABLE TO PAY COMPENSATION TO OTHERS SOLELY
BECAUSE OF SUCH GRANT.
"C. SUBCONTRACTOR SHALL EXERT ALL REASONABLE EFFORT TO ADVISE THE
CONTRACTING OFFICER, AT THE TIME OF DELIVERY OF THE SUBJECT DATA
FURNISHED UNDER THIS SUBCONTRACT, (I) OF ALL INVASIONS OF THE RIGHT OF
PRIVACY CONTAINED THEREIN AND (II) OF ALL PORTIONS OF SUCH DATA COPIED
FROM WORK NOT COMPOSED OR PRODUCED IN THE PERFORMANCE OF THIS
SUBCONTRACT AND NOT LICENSED UNDER THIS ARTICLE 37.
"D. SUBCONTRACTOR SHALL REPORT TO LOCKHEED AND THE CONTRACTING
OFFICER, PROMPTLY AND IN REASONABLE WRITTEN DETAIL, EACH NOTICE OR CLAIM
OF COPYRIGHT INFRINGEMENT RECEIVED BY SUBCONTRACTOR WITH RESPECT TO ALL
SUBJECT DATA DELIVERED UNDER THIS SUBCONTRACT.
"F. SUBJECT TO THE PROVISO OF B. ABOVE AND UNLESS OTHERWISE LIMITED
BELOW, THE GOVERNMENT MAY DUPLICATE, USE, AND DISCLOSE IN ANY MANNER AND
FOR ANY PURPOSE WHATSOEVER, AND HAVE OTHERS SO DO, ALL SUBJECT DATA
DELIVERED UNDER THIS SUBCONTRACT.
"G. NOTWITHSTANDING ANY PROVISIONS OF THIS SUBCONTRACT CONCERNING
INSPECTION AND ACCEPTANCE, THE GOVERNMENT AND LOCKHEED SHALL HAVE THE
RIGHT AT ANY TIME TO MODIFY, REMOVE, OBLITERATE OR IGNORE ANY MARKING
NOT AUTHORIZED BY THE TERMS OF THIS SUBCONTRACT ON ANY PIECE OF SUBJECT
DATA FURNISHED UNDER THIS SUBCONTRACT.
"H. DATA NEED NOT BE FURNISHED FOR STANDARD COMMERCIAL ITEMS OR
SERVICES WHICH ARE NORMALLY OR HAVE BEEN SOLD OR OFFERED TO THE PUBLIC
COMMERCIALLY BY ANY SUPPLIER AND WHICH ARE INCORPORATED AS COMPONENT
PARTS IN OR TO BE USED WITH THE PRODUCT OR PROCESS BEING DEVELOPED IF IN
LIEU THEREOF IDENTIFICATION OF SOURCE AND CHARACTERISTICS (INCLUDING
PERFORMANCE SPECIFICATIONS, WHEN NECESSARY) SUFFICIENT TO ENABLE THE
GOVERNMENT TO PROCURE THE PART OR AN ADEQUATE SUBSTITUTE, ARE FURNISHED;
AND FURTHER,"PROPRIETARY DATA" NEED NOT BE FURNISHED FOR OTHER ITEMS
WHICH WERE DEVELOPED AT PRIVATE EXPENSE AND PREVIOUSLY SOLD OR OFFERED
FOR SALE, INCLUDING MINOR MODIFICATIONS THEREOF, WHICH ARE INCORPORATED
AS COMPONENT PARTS IN OR TO BE USED WITH THE PRODUCT OR PROCESS BEING
DEVELOPED IF IN LIEU THEREOF SUBCONTRACTOR SHALL IDENTIFY SUCH OTHER
ITEMS AND THAT "PROPRIETARY DATA" PERTAINING THERETO WHICH IS NECESSARY
TO ENABLE REPRODUCTION OR MANUFACTURE OF THE ITEM OR PERFORMANCE OF THE
PROCESS. FOR THE PURPOSE OF THIS CLAUSE ,PROPRIETARY DATA" MEANS DATA
PROVIDING INFORMATION CONCERNING THE DETAILS OF A CONTRACTOR'S SECRETS
OF MANUFACTURE, SUCH AS MAY BE CONTAINED IN BUT NOT LIMITED TO ITS
MANUFACTURING METHODS OR PROCESSES, TREATMENT AND CHEMICAL COMPOSITION
OF MATERIALS, PLANT LAYOUT AND TOOLING, TO THE EXTENT THAT SUCH
INFORMATION IS NOT DISCLOSED BY INSPECTION OR ANALYSIS OF THE PRODUCT
ITSELF AND TO THE EXTENT THAT SUBCONTRACTOR HAS PROTECTED SUCH
INFORMATION FROM UNRESTRICTED USE BY OTHERS.'
APPARENTLY, IN FURNISHING DATA TO LOCKHEED PURSUANT TO THE
SUBCONTRACT REQUIREMENTS, YOU APPENDED A PROPRIETARY STAMP, PARTICULARLY
ON YOUR DRAWING NO. 11SK295, WHICH READ:
"THIS DRAWING IS LOANED SUBJECT TO RETURN ON DEMAND, AND IS NOT TO BE
USED OR COPIED IN WHOLE OR IN PART EXCEPT AS EXPRESSLY AUTHORIZED BY ALL
AMERICAN ENGINEERING COMPANY.'
WHETHER THIS RESTRICTIVE LEGEND IN FACT PRECLUDED LOCKHEED AND/OR THE
GOVERNMENT FROM EXERCISING UNLIMITED RIGHTS WITH RESPECT TO SUCH DATA IS
DEPENDENT UPON WHETHER SUCH DATA WAS ,SUBJECT DATA" WITHIN THE MEANING
OF ARTICLE 37. IN VIEW OF THE DELIVERY REQUIREMENTS OF YOUR
SUBCONTRACT, COUPLED WITH THE SUBCONTRACT PROVISION RELATING TO THE
UNRESTRICTED USE OF "SUBJECT DATA" BY THE GOVERNMENT, WE SEE NO
SUBSTANTIAL BASIS FOR REGARDING THE DATA INVOLVED HERE AS OTHER THAN
"SUBJECT DATA.' SEE 38 COMP. GEN. 667. THAT BEING THE CASE, BOTH
LOCKHEED AND THE GOVERNMENT COULD PROPERLY IGNORE ANY SUCH RESTRICTIVE
LEGENDS ON ANY PIECE OF "SUBJECT DATA" PURSUANT TO ARTICLE 37G. IN THIS
CONNECTION, THE STAFF JUDGE ADVOCATE GENERAL, AIR FORCE LOGISTICS
COMMAND, REVIEWED THE RESULTS OF THE INVESTIGATION MADE OF YOUR
COMPLAINT AND HAS CONCLUDED, IN PERTINENT PART, THAT:
"4. PARTICULAR REFERENCE IS MADE TO THE 12 APRIL 1963 LOCKHEED
MISSILES AND SPACE COMPANY LETTER TO ALL AMERICAN ENGINEERING WHEREIN
LOCKHEED FIRMLY ESTABLISHED THAT THE "SUBJECT DATA" TO BE DELIVERED
UNDER LOCKHEED'S SUBCONTRACT 28-623 WITH ALL AMERICAN ENGINEERING WAS TO
BE DELIVERED UNDER THE TERMS OF THE STANDARD ASPR R AND D DATA CLAUSE
(ASPR 9-203.1 AND 9-203.4) UNDER WHICH DATA RIGHTS CLAUSE THE SUPPLIER
OF ENGINEERING DATA MAY WITHHOLD CERTAIN CLASSES AND TYPES OF
ENGINEERING DATA FROM DELIVERY BUT SAID SUPPLIER MAY NOT DELIVER TO THE
PRIME CONTRACTOR ENGINEERING DRAWINGS WHICH BEAR AN ASPR PROPRIETARY
STAMP OR A CORPORATE PROPRIETARY STAMP. THE LOCKHEED MISSILES AND SPACE
COMPANY LETTER DATED 26 JUNE 1963 TO THE AIR FORCE SPACE SYSTEMS
DIVISION FULLY ESTABLISHED THAT THE DATA SPECIFIED FOR DELIVERY UNDER
THE ALL AMERICAN ENGINEERING SUBCONTRACT WAS IN FACT CONTROLLED BY THE
STANDARD ASPR R AND D DATA CLAUSE. IN ADDITION, LOCKHEED OFFICIALS HAVE
STATED THAT BY THE TERMS OF THEIR PURCHASE ORDER THEY ASKED FOR ALL
DRAWINGS RELATED TO THE INITIAL CONFIGURATION OF THE RETRIEVAL DEVICE
AND DRAWING 11SK295 WAS IN FACT DELIVERED TO LOCKHEED UNDER THE DATA
RIGHTS TERMS OF THE SUBCONTRACT. STATED OTHERWISE, UNDER THE STANDARD
ASPR R AND D DATA CLAUSE, ALL AMERICAN ENGINEERING COULD HAVE ELECTED TO
RETAIN CERTAIN TYPES AND CLASSES OF DATA RELATED TO STANDARD COMMERCIAL
ITEMS AND OTHER CLASSES OF PROPRIETARY DATA RELATED TO OTHER ITEMS WHICH
WERE DEVELOPED AT PRIVATE EXPENSE AND PREVIOUSLY SOLD OR OFFERED FOR
SALE. IF DATA WITHHOLDING OF THIS TYPE OF DATA IS ELECTED, THE
SUBCONTRACTOR WOULD BE OBLIGATED TO IDENTIFY SUCH OTHER ITEMS IN TERMS
OF IDENTIFICATION OF SOURCE AND CHARACTERISTICS SUFFICIENT TO ENABLE THE
GOVERNMENT TO PROCURE THE PART OR AN ADEQUATE SUBSTITUTE.
THE RECORD OF THIS CASE INDICATES THAT THE ENGINEERING DATA ALL
AMERICAN ENGINEERING FURNISHED TO THE PRIME CONTRACTOR LOCKHEED MISSILES
AND SPACE COMPANY WAS THE ENGINEERING DATA AS ILLUSTRATED BY ALL
AMERICAN ENGINEERING DRAWING 11SK295. THIS BEING THE CASE, ALL AMERICAN
ENGINEERING HAS ELECTED TO FURNISH THE ENGINEERING DRAWINGS REQUIRED BY
THE SUBCONTRACT UNDER THE CONTROL OF THE STANDARD ASPR R AND D DATA
CLAUSE WHICH CLAUSE BY ITS OWN TERMS IS CLEARLY A RIGHTS IN DATA
UNLIMITED CLAUSE. IF THE ENGINEERING INFORMATION DEPICTED ON THE ALL
AMERICAN ENGINEERING DRAWING 11SK295 CAN BE CONSIDERED AS MEETING THE
ASPR DEFINITION OF "PROPRIETARY DATA" SUCH PROPRIETARY DATA WAS
CONVERTED TO NON-PROPRIETARY DATA BY THE ACT OF ALL AMERICAN ENGINEERING
IN DELIVERING THE ENGINEERING DRAWINGS TO LOCKHEED MISSILES AND SPACE
COMPANY UNDER THE CONTROL OF THE ASPR R AND D RIGHTS IN DATA UNLIMITED
CLAUSE. IT IS CONCLUDED THAT ALL AMERICAN ENGINEERING DRAWING 11SK295
REVISION F WAS IN LAW AND FACT A NON-PROPRIETARY DRAWING AT THE TIME IT
WAS USED TO ACCOMPLISH THE REVERSE ENGINEERING BY THE SMAMA ENGINEERS.
ON THIS BASIS, NO LEGAL OR FACTUAL GROUNDS ARE APPARENT WHICH SUPPORTS
THE ALL AMERICAN ENGINEERING ALLEGATION OF MISUSE OF PROPRIETARY DATA.
"6. THE ONLY MANNER IN WHICH THE ALL AMERICAN ENGINEERING DRAWING
COULD HAVE RETAINED ITS PROPRIETARY CHARACTER WOULD HAVE BEEN FOR ALL
AMERICAN ENGINEERING TO SUPPLY SUCH ENGINEERING DRAWINGS TO LOCKHEED
MISSILES AND SPACE COMPANY ON A "VOLUNTARY BASIS" AND EXTERNAL TO A
CONTRACTUAL REQUIREMENT FOR THE DELIVERY OF DATA FOR THE ENTIRE PERIOD
DURING WHICH ALL AMERICAN ENGINEERING WAS IN FACT UNDER A SUCCESSIVE
SEQUENCE OF SUBCONTRACTS WITH LOCKHEED MISSILES AND SPACE COMPANY. SUCH
CONDITION OF VOLUNTARY SUBMITTALS HAS NOT BEEN ESTABLISHED BY
RE-EXAMINATION OF THIS CASE WITH THE LOCKHEED MISSILES AND SPACE COMPANY
CONTRACTING OFFICER AND KNOWLEDGEABLE LOCKHEED ENGINEERS RESPONSIBLE FOR
MONITORING THE SUBCONTRACT WITH ALL AMERICAN ENGINEERING. IT IS THE
LOCKHEED POSITION THAT ALL OF THE ENGINEERING DRAWINGS RELATED TO THE
INITIAL CONFIGURATION OF THE RETRIEVAL DEVICE TO BE USED WITH JC-130B
AIRCRAFT WOULD BE DELIVERED UNDER THE DATA RIGHTS CLAUSE AND THE DATA
REQUIREMENTS OF THE RESPECTIVE SUBCONTRACTS. SUCH CONDITION AS ABOVE
RECITED AFFORDS THE DELIVERY OF RIGHTS IN DATA UNLIMITED OR
NON-PROPRIETARY DATA BOTH TO THE PRIME CONTRACTOR LOCKHEED AND THE AIR
FORCE.'
WHILE THE RECORD BEFORE US REVEALS THAT, IN ADDITION TO THE STANDARD
REVERSE ENGINEERING TECHNIQUES, AIR FORCE ENGINEERS DID IN FACT RESORT
TO THE USE OF YOUR DRAWING 11SK295, REVISION F" IN PREPARING THE SUBJECT
REQUEST FOR PROPOSALS, WE ARE INFORMED THAT THE DRAWING WAS USED ONLY AS
A BASIS TO UPGRADE AND REVISE A REDESIGNED HOOK TO WHICH NEW TOLERANCES
WERE APPLIED. HOWEVER, SINCE THE DRAWING WAS NOT, IN FACT OR IN LAW, A
PROPRIETARY DRAWING, WITHIN THE DEFINITION OF "PROPRIETARY DATA," BUT
RATHER A PART OF SUBCONTRACT "SUBJECT DATA," WE ATTACH NO PARTICULAR
SIGNIFICANCE TO THE FACT THAT THE DRAWING WAS USED IN A REVERSE
ENGINEERING TECHNIQUE WHICH PRODUCED TECHNICAL RESULTS SUBSTANTIALLY
SUPERIOR TO THE ORIGINAL DRAWING.
IN ARRIVING AT OUR CONCLUSION THAT THE USE OF THE DRAWINGS, AS
UPGRADED, BY THE GOVERNMENT IN REQUEST FOR PROPOSALS NO. 65-08561 WAS
PROPER, WE ALSO CONSIDERED THE OBLIGATION OF LOCKHEED UNDER ITS PRIME
CONTRACT TO FURNISH ALL "SUBJECT DATA" TO THE GOVERNMENT AS PART OF THE
TOTAL CONTRACT CONSIDERATION. WE AGREE THAT AN OWNER OF PROPRIETARY
INFORMATION MAY PROTECT HIMSELF BY CONTRACT AGAINST THE UNAUTHORIZED
DISCLOSURE OF HIS TRADE SECRETS (B-155884, MAY 18, 1965); BUT AN OWNER
OF PROPRIETARY INFORMATION MAY ALSO BY CONTRACT, AS HERE, OBLIGATE
HIMSELF TO DELIVER SUCH INFORMATION FOR UNRESTRICTED USE AS PART OF THE
CONTRACT CONSIDERATION--- AND SUCH UNRESTRICTED USE IS NOT THEN A MATTER
OF GENERAL LAW BUT OF CONTRACT.
B-157005, DEC. 6, 1965
TO MR. EDWARD D. PADGETT:
THIS IS IN REPLY TO YOUR LETTERS OF SEPTEMBER 27, OCTOBER 4, AND
NOVEMBER 16, 1965, IN WHICH YOU MAKE CLAIM FOR $45.70 FOR SERVICES
RENDERED ON SEPTEMBER 18, 1964, AND $145 FOR EXTRAORDINARY MEDICAL
EXPENSES INCURRED ON SEPTEMBER 14, 15, 21 AND THEREAFTER; ALSO, YOU IN
EFFECT SEEK RECONSIDERATION OF OUR PREVIOUS ACTION WITH RESPECT TO
DENYING YOU COMPENSATION FOR CHARGES OF LEAVE WITHOUT PAY ON SEPTEMBER
18 AND 21, 1964.
IT IS REPORTED BY THE PICATINNY ARSENAL THAT AT 1600 HOURS ON
SEPTEMBER 18, 1964, YOUR SUPERIORS ENDEAVORED TO LOCATE YOU AT YOUR
PLACE OF DUTY BUT WERE UNABLE TO DO SO. YOUR SUPERVISOR DID NOT KNOW
YOUR WHEREABOUTS AND HAD NOT GIVEN YOU PERMISSION TO LEAVE. A TIME-CARD
ENTRY TO THIS EFFECT SHOWING YOU AS ABSENT WITHOUT LEAVE FROM 1600-1630
ON SEPTEMBER 18, 1964, WAS EXECUTED BY AN AUTHORIZED EMPLOYEE OF THE
ARSENAL ON THE BASIS OF A WRITTEN REPORT OF YOUR SUPERVISOR. IT IS YOUR
POSITION THAT YOU LEFT BUILDING 354 TO SEE SURGEON FEENEY OF THE ARSENAL
AND THEN PROCEEDED TO OTHER DUTIES INCLUDING PROVIDING INFORMATION TO
MR. H. SMITH, PATENT COUNSEL. YOU ASSERT THAT YOU CHECKED OUT OF THE
ARSENAL AT 1639 ON THAT DATE. NOWHERE DO YOU INDICATE THAT YOU HAD
PERMISSION TO LEAVE YOUR POST OF DUTY TO ATTEND TO THESE MATTERS. UNDER
SUCH CIRCUMSTANCES IT WAS PROPER FOR THE ADMINISTRATIVE OFFICER IN HIS
DISCRETION TO CHARGE YOUR ABSENCE ( 1/2-HOUR) AS LEAVE WITHOUT PAY
RATHER THAN TO ANNUAL LEAVE. 44 COMP. GEN. 274.
INSOFAR AS COUNSELING MR. SMITH IS CONCERNED YOUR PLACE OF DUTY WAS
YOUR ASSIGNED WORK SITE AND YOU ARE NOT ENTITLED TO PAY FOR VOLUNTARY
PROFESSIONAL SERVICES PERFORMED WITHOUT ORDERS FROM YOUR SUPERVISORS.
SEE B-134004, NOVEMBER 5, 1957; B-105186, SEPTEMBER 5, 1951 (COPIES
ENCLOSED). WE POINT OUT THAT YOU RECEIVED PAY FOR SEVEN AND ONE-HALF
HOURS ON THAT DAY (SEPTEMBER 18, 1964).
WITH RESPECT TO YOUR CLAIMS FOR LEAVE WITHOUT PAY AND EXTRAORDINARY
MEDICAL EXPENSES INCURRED AS A RESULT OF TESTS AND EXAMINATIONS BY
PRIVATE PHYSICIANS ON SEPTEMBER 21, 1964, THE RECORD INDICATES THAT POST
SURGEON FEENEY, BY MEMO DATED SEPTEMBER 11, 1964, DIRECTED YOU TO REPORT
FOR AN EXAMINATION AT THE U.S. PUBLIC HEALTH SERVICE HOSPITAL,
STAPLETON, STATEN ISLAND, NEW YORK, AT 1:30 P.M. ON SEPTEMBER 21, 1964.
A RECORD MADE ON SEPTEMBER 21, 1964, OF A TELEPHONE CONVERSATION BETWEEN
YOU AND MR. ROBERT F. DRUMMOND, WHO WORKED WITH YOUR SUPERVISOR, MR.
SUOZZO, INDICATED THAT ON THE MORNING OF THAT DAY, YOU WERE AWARE OF
YOUR APPOINTMENT AT THE PUBLIC HEALTH SERVICE HOSPITAL, STATEN ISLAND,
AND INTENDED TO KEEP IT.
A LOG BOOK ENTRY SIGNED BY YOU ON THAT SAME MORNING STATES THAT YOU
WERE DEPARTING BUILDING 354 WHERE YOU WERE STATIONED AND REPORTING TO
BUILDING 151 FOR TRANSPORTATION TO STATEN ISLAND. THIS IS CONSIDERED TO
BE COMPELLING PROOF OF YOUR DIRECTION TO PROCEED TO THE HOSPITAL AT
STATEN ISLAND FOR AN EXAMINATION. IT IS UNLIKELY THAT THE ACTIVITY
WOULD DIRECT YOU TO PROCEED FOR EXAMINATION BY PUBLIC HEALTH DOCTORS AT
STATEN ISLAND ON SEPTEMBER 21, 1964, AND AT THE SAME TIME AUTHORIZE AN
EXAMINATION BY PRIVATE PHYSICIANS AT GOVERNMENT EXPENSE.
THIS INTERPRETATION IS ALSO CONSISTENT WITH THE ASSERTION OF THE
ACTIVITY THAT IT NEVER AGREED TO ACCEPT THE EXPENSE OF ANY SUCH
EXAMINATION OF YOU BY PRIVATE PHYSICIANS. IN THIS REGARD NEITHER THE
CIVIL SERVICE COMMISSION NOR AGENCY REGULATIONS IN EFFECT ON SEPTEMBER
21, 1964, MADE PROVISION FOR ELECTION BY AN EMPLOYEE TO UTILIZE A
PHYSICIAN OF HIS OWN CHOICE IN FITNESS FOR DUTY EXAMINATIONS WITH
EXPENSES TO BE PAID BY THE AGENCY. SEE FEDERAL PERSONNEL MANUAL 339,
SUBCHAPTER 1, SECTION 1-3, BULLETIN NO. 171-87, OCTOBER 3, 1963;
DEPARTMENT OF THE ARMY CIVILIAN PERSONNEL REGULATIONS S13, PARAGRAPH
3.6. ACCORDINGLY, EVEN IF YOU HAD BEEN GRANTED PERMISSION TO BE TESTED
BY YOUR PRIVATE PHYSICIAN NO AUTHORITY EXISTED FOR THE AGENCY TO PAY FOR
HIS SERVICES. AS TO THE CHARGE OF LEAVE WITHOUT PAY FOR THAT DAY, THE
PICATINNY ARSENAL REPORTS THERE IS NO RECORD OF AN APPLICATION FOR SICK
LEAVE BEING SUBMITTED BY YOU (YOUR EXHIBIT NO. 2B); ALSO, THAT IF SUCH
AN APPLICATION HAD BEEN APPROVED A COPY WOULD HAVE BEEN RETURNED TO YOU
INDICATING SUCH APPROVAL ON THE REVERSE SIDE THEREOF. IN ANY EVENT, THE
MATTER OF CHARGING YOU LEAVE WITHOUT PAY IN LIEU OF GRANTING YOU SICK
LEAVE FOR SEPTEMBER 21, 1964, WAS WITHIN THE DISCRETION OF THE ARSENAL,
AS INDICATED IN OUR PRIOR DECISIONS TO YOU, AND WE HAVE NO AUTHORITY
UNDER THE RELATED CIRCUMSTANCES TO CHANGE THAT ACTION OR OTHERWISE ALLOW
YOU COMPENSATION FOR THAT DAY.
WE NOTE THAT YOU CITE CERTAIN OF OUR DECISIONS INVOLVING EMPLOYEES
INVOLUNTARILY PLACED IN A SICK LEAVE OR LEAVE WITHOUT PAY STATUS. WE
ENCLOSE COPIES OF MORE RECENT DECISIONS, B-136721, JANUARY 18, 1960, AND
B-150087, NOVEMBER 30, 1962, WHICH CLEARLY INDICATE THAT AN AGENCY MAY
PLACE AN EMPLOYEE ON INVOLUNTARY LEAVE BECAUSE OF INABILITY TO PERFORM
DUTIES IF BASED UPON COMPETENT MEDICAL ADVICE. OF COURSE, IN YOUR CASE
THE LEAVE WITHOUT PAY STATUS AROSE AS A RESULT OF YOUR OWN ACTION IN
BEING ABSENT WITHOUT AUTHORITY FROM YOUR APPOINTED PLACE OF DUTY.
ON THE BASIS OF THE FOREGOING, WE MUST SUSTAIN OUR PREVIOUS ACTION IN
DENYING ADDITIONAL COMPENSATION FOR SEPTEMBER 18 AND 21, 1964, AND MUST
DISALLOW YOUR NEW CLAIMS FOR A FEE OF $42 PLUS MILEAGE TO COVER SERVICES
RENDERED AT THE CALL OF MR. H. SMITH, PATENT COUNSEL, AND FOR
REIMBURSEMENT OF EXPENSES OF MEDICAL EXAMINATIONS DURING THE PERIOD IN
QUESTION.
B-157254, DEC. 6, 1965
TO THE SECRETARY OF THE ARMY:
REFERENCE IS MADE TO LETTER DATED NOVEMBER 2, 1965, FROM THE GENERAL
COUNSEL, HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND, FORWARDING A
REPORT ON A REQUEST BY NRC EQUIPMENT CORPORATION (NRC), NEWTON,
MASSACHUSETTS, FOR AN INCREASE IN THE PRICE PAID BY THE GOVERNMENT FOR
TWO SETS OF FURNACE HEAT SHIELDS FURNISHED BY NRC TO THE WATERTOWN
ARSENAL, WATERTOWN, MASSACHUSETTS, UNDER CONTRACT NO.
01-19-066-S5-02141/X), DATED NOVEMBER 4, 1964.
THE RECORD SHOWS THAT THE ARSENAL PURCHASED FROM NRC UNDER CONTRACT
NO. DA-19-066-ORD-938, DATED JUNE 26, 1962, A HIGH VACUUM HEAT TREATING
FURNACE, NRC MODEL 2915-B, AT A COST OF $34,775, TOGETHER WITH THREE
EXTRA TUNGSTEN HEATING ELEMENTS AT $525 EACH AND TWO EXTRA
TUNGSTEN-MOLYBDENUM
HEAT SHIELD ASSEMBLIES AT $4,000 EACH. DELIVERY OF THE ITEMS WAS
MADE IN 1963.
ON AUGUST 18, 1964, IN RESPONSE TO AN INQUIRY FROM AN ARMY MATERIEL
COMMAND REQUISITIONER AS TO THE COST OF REPLACEMENTS FOR THE HEAT
SHIELDS, HEATING ELEMENTS AND WORK SUPPORTS FOR THE SAME FURNACE, NRC
QUOTED TO THE ARSENAL UNIT PRICES OF $389 FOR THE SHIELDS, $527 FOR THE
HEATING ELEMENTS, AND $702 FOR THE WORK SUPPORTS. ON OCTOBER 5, THE
ARSENAL ISSUED TO NRC A REQUEST FOR PROPOSALS, NO. S-5-0181, PURSUANT TO
WHICH NRC EXECUTED A FORMAL QUOTATION DATED OCTOBER 13 LISTING THE SAME
PRICES AS QUOTED ORALLY AND BY LETTER OF AUGUST 18 ON THE ITEMS. ON
NOVEMBER 4, PURSUANT TO THE AUTHORITY CONTAINED IN 10 U.S.C. 2304 (A)
(10) FOR NEGOTIATION OF CONTRACTS WHERE IT IS IMPRACTICABLE TO OBTAIN
COMPETITION, NRC WAS AWARDED CONTRACT NO. 01-19-066-S5-02141/X), FOR ALL
THREE ITEMS AT THE PRICES QUOTED.
SHIPMENT OF THE ITEMS WAS MADE IN TWO SEGMENTS, THE HEATING ELEMENTS
BEING DELIVERED IN NOVEMBER 1964 AND THE SHIELDS AND SUPPORTS IN MARCH
1965. PAYMENT FOR ALL ITEMS WAS MADE BY ONE ARMY FINANCE CHECK DATED
APRIL 8, 1965, IN THE AMOUNT OF $3,236.
ON APRIL 12, NRC ADDRESSED A LETTER TO THE CONTRACTING OFFICER AT THE
ARSENAL STATING THAT, IN POSTING THE COST OF THE MATERIAL IN THE
PROCUREMENT ITEMS, IT HAD DETECTED A TYPOGRAPHICAL ERROR OF $7,000 IN
THE PRICE OF THE SHIELDS. IT WAS EXPLAINED THAT THE UNIT COST OF THE
SHIELDS SHOULD HAVE BEEN QUOTED AS $3,890 RATHER THAN $389, MAKING A
TOTAL PRICE OF $7,780 IN LIEU OF $778. TO ESTABLISH THE PRICE RANGE FOR
THE SHIELDS, NRC CITED THE 1962 CONTRACT PRICE OF $4,000 FOR SIMILAR
SHIELDS FOR THE SAME FURNACE. ACCORDINGLY, NRC REQUESTED RELIEF
OFFERING TO ACCEPT RETURN OF THE SHIELDS FOR REFUND OF THE PURCHASE
PRICE OF $778. IT IS TO BE NOTED, HOWEVER, THAT IN SUBSEQUENT
CORRESPONDENCE NRC HAS STATED THAT THE ORIGINAL PRICE OF $389
REPRESENTED A BASE PRICE OF $387 PLUS $2 FOR TRANSPORTATION; THEREFORE,
THE CORRECT PRICE FOR EACH UNIT WAS $3870 PLUS $2 FOR TRANSPORTATION, OR
A TOTAL OF $7,744 FOR BOTH UNITS.
BY LETTER DATED MAY 6, NRC WAS ADVISED BY THE CONTRACTING OFFICER
THAT NO RELIEF COULD BE GRANTED. THE LETTER READS, IN PART AS FOLLOWS:
"AN INDICATION OF THE POLICY APPLIED IN CASES SIMILAR TO YOURS MAY BE
FOUND IN THE FOLLOWING RULE CITED BY THE UNITED STATES COURT OF CLAIMS:
"ACCEPTANCE OF PAYMENT WITHOUT NOTIFICATION OF A MISTAKE PRECLUDES THE
CONTRACTOR FROM ASSERTING A SUBSEQUENT CLAIM.'
"THE INABILITY TO AMEND OR MODIFY THE SUBJECT CONTRACT TO PROVIDE ANY
EQUITABLE ADJUSTMENT IN THIS INSTANCE IS CLEARLY SET FORTH IN THE
LANGUAGE OF ASPR 17-205.1 (C) AS FOLLOWS: "NO CONTRACT SHALL BE AMENDED
OR MODIFIED (I) UNLESS THE REQUEST THEREFOR HAS BEEN FILED BEFORE ALL
OBLIGATIONS (INCLUDING FINAL PAYMENT) UNDER THE CONTRACT HAVE BEEN
DISCHARGED.'
"SINCE THE CONTRACTING OFFICER RECEIVED NO NOTICE OF THIS MISTAKE IN
PRICING UNTIL AFTER COMPLETION OF THE CONTRACT, AND HAD NO KNOWLEDGE
THEREOF, HE CONSEQUENTLY HAS NO AUTHORITY TO MODIFY OR AMEND THE
CONTRACT TO FURNISH RELIEF TO YOUR COMPANY.'
NRC CONCEDES THAT THE ERROR IN ITS QUOTATION WAS DUE SOLELY TO ITS
OWN CARELESSNESS. HOWEVER, IN CLAIMING RELIEF, IT CITES THE SIZEABLE
DIFFERENCE BETWEEN THE CORRECT PRICE AND THE PRICE PAID BY THE ARSENAL
FOR THE SHIELDS AND CONTENDS THAT IT WOULD BE UNCONSCIONABLE FOR THE
GOVERNMENT TO RETAIN A MAJOR BENEFIT FROM THE MISTAKE. AFFIDAVITS OF
NRC OFFICIALS AND EMPLOYEES ATTEST THAT THE PRICES OF SHIELDS FOR THE
NRC MODEL 2915-B FURNACE RANGE FROM $2,400 OR $2,500 TO $4,500 AND THAT
THE UNIT PRICE OF THE SHIELDS IN QUESTION IS $3,870 FOB CONTRACTOR'S
PLANT AT NEWTON. WORK SHEETS FURNISHED BY NRC, ON WHICH IT ALLEGEDLY
BASED ITS QUOTATION, BEAR A PENCILED NOTATION ,2972,001 SET" FOR THE
SHIELDS, WHICH IS CLAIMED TO BE THE UNIT PRICE OF $2,972 PAID BY NRC TO
ITS
SUPPLIER, NATIONAL RESEARCH CORPORATION, FOR THE SHIELDS, AS
EVIDENCED BY AN INVOICE DATED MARCH 11, 1965. THE PRICE OF $3,870 IS
SAID TO BE BASED ON THE COST PLUS A 30 PERCENT MARKUP ($2,972 PLUS
$891.60, TOTAL $3,863, ROUNDED TO $3,870).
THE CONTRACTING OFFICER STATES, ON THE BASIS OF THE COST TO THE
CONTRACTOR AND THE 1962 PURCHASE PRICE OF THE SHIELDS, THAT, IN HIS
OPINION, A BONA FIDE ERROR WAS MADE BY NRC. HOWEVER, THE GRANTING OF
RELIEF IN DISAPPROVED ON THE GROUNDS THAT THE GOVERNMENT HAD NO NOTICE
OF ERROR SINCE THERE WAS NO PUBLISHED PRICE LIST FOR THE SHIELDS AND THE
NEGOTIATOR OF THE CONTRACT FOR THE ARSENAL WAS NOT THE CONTRACTING
OFFICER WHO AWARDED THE 1962 CONTRACT. IT IS FURTHER STATED THAT A
COMPLETE PRICE ANALYSIS IS NOT USUALLY MADE FOR A CONTRACT OF SUCH SMALL
DOLLAR VALUE; THAT, IN ANY EVENT, THE CONTRACTOR, AT THE REQUEST OF THE
ARSENAL, STATED ITS PRICE WAS FAIR AND REASONABLE AND HAD SUFFICIENT
TIME TO DISCOVER ITS ERROR BEFORE AWARD; AND THAT THE MISTAKE WAS NOT
ALLEGED UNTIL AFTER DELIVERY AND PAYMENT HAD BEEN MADE. HEADQUARTERS,
ARMY MATERIEL COMMAND, CONCURS WITH THE CONTRACTING OFFICER'S
RECOMMENDATION.
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 17-205.1 (C), CITED IN
THE CONTRACTING OFFICER'S LETTER OF MAY 6, 1965, AS PRECLUDING EQUITABLE
ADJUSTMENT BECAUSE THE CLAIM WAS MADE AFTER PAYMENT, RELATES TO CASES
WHICH THE DEPARTMENT OF DEFENSE IS AUTHORIZED TO CONSIDER FOR RELIEF
UNDER PUBLIC LAW 85-804, AUGUST 28, 1958, 72 STAT. 972, 50 U.S.C.
1431-1435, AS IMPLEMENTED BY EXECUTIVE ORDER 10789, DATED NOVEMBER 14,
1958. WHILE NO SIMILAR RESTRICTION IS IMPOSED UPON THE JURISDICTION OF
OUR OFFICE TO CONSIDER CLAIMS ARE BASED UPON JUDICIAL PRECEDENT AND, AS
A GENERAL RULE, NO RELIEF WILL BE GRANTED IN THE CASE OF A CONTRACTOR'S
UNILATERAL MISTAKE AFTER THE BID OR OFFER HAS BEEN ACCEPTED BY THE
GOVERNMENT UNLESS THE CIRCUMSTANCES ARE SUCH THAT THE GOVERNMENT SHOULD
HAVE BEEN ON NOTICE OF THE PROBABILITY OF MISTAKE, THUS NECESSITATING
VERIFICATION BEFORE ACCEPTANCE OF THE BID OR OFFER. OGDEN AND DOUGHERTY
V. UNITED STATES, 102 CT.CL. 249 AND SALIGMAN ET AL. V. UNITED STATES,
56 F.SUPP. 505, 507. SEE ALSO KEMP V. UNITED STATES, 38 F.SUPP. 369,
WHERE A MISTAKE IN BID WAS SO GROSS (LOW BID LESS THAN ONE THIRD OF THE
NEXT TWO LOW BIDS) THAT IT COULD BE SAID THE GOVERNMENT "WAS OBVIOUSLY
GETTING SOMETHING FOR NOTHING," AND RELIEF WAS THEREFORE ALLOWED
SUBSEQUENT TO PERFORMANCE OF THE CONTRACT. CONSISTENT THEREWITH, OUR
OFFICE HAS
ALLOWED RELIEF WHERE ENFORCEMENT OF A CONTRACT AT THE ERRONEOUS BID
PRICES WAS CONSIDERED TO BE UNCONSCIONABLE. B-146413, AUGUST 1, 1961;
B-144834, FEBRUARY 2, 1961. SEE ALSO C. N. MONROE MANUFACTURING COMPANY
V. UNITED STATES, 143 F.SUPP. 449.
IN THE INSTANT CASE IT IS OUR OPINION THAT THE FACTS OF RECORD
ESTABLISH THAT THE CONTRACTOR MADE A BONA FIDE ERROR IN ITS QUOTATION,
AS ALLEGED, WHICH IT DID NOT DISCOVER UNTIL AFTER DELIVERY AND PAYMENT.
WHILE THE RECORD INDICATES THAT THE CONTRACTING OFFICER HAD NO ACTUAL
NOTICE OF THE ERROR UNTIL AFTER THE CONTRACT HAD BEEN FULFILLED, SINCE
THE PROCUREMENT WAS ON A SOLE SOURCE BASIS AND THERE WAS NO OPPORTUNITY
TO COMPARE BID PRICES, IT IS CLEAR THAT THE ARSENAL'S RECORDS OF THE
1962 PROCUREMENT DID INDICATE THAT THE 1964 BID PRICE MUST BE IN ERROR.
WHETHER OR NOT INFORMATION OF THIS NATURE IN THE PROCURING ACTIVITY'S
FILES MAY BE IMPUTED TO THE CONTRACTING OFFICER, IT IS EVIDENT THAT IF
THE CONTRACTING OFFICER, IN COMPLIANCE WITH THE REQUIREMENT IN ASPR
3-807.2 FOR A COST OR PRICE ANALYSIS IN EVERY NEGOTIATED PROCUREMENT,
HAD CONSULTED THE RECORD OF THE 1962 PURCHASE OF THE FURNACE, IT IS
REASONABLE TO ASSUME THAT THE 1964 QUOTATION ON THE HEAT SHIELDS WOULD
HAVE BEEN QUESTIONED SINCE IT WAS LESS THAN ONE TENTH OF THE 1962
CONTRACT PRICE FOR THE ITEMS. ACCORDINGLY, AND SINCE IT WOULD BE
UNCONSCIONABLE FOR THE GOVERNMENT TO RETAIN THE ITEMS AT SUCH A LOW
PRICE, AN ADDITIONAL PAYMENT TO THE CONTRACTOR IN THE AMOUNT OF $6,966,
REPRESENTING THE CORRECT UNIT PRICE OF $3,870 PLUS $2 TRANSPORTATION
CHARGE FOR EACH SHIELD, TOTAL $7,744, LESS THE PRIOR PAYMENT OF $778 FOR
THE SHIELDS, IS AUTHORIZED.
A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING
SUCH PAYMENT.
B-157863, DEC. 6, 1965
TO BLACKHAWK MANUFACTURING COMPANY:
THIS REFERS TO YOUR LETTERS OF OCTOBER 15 AND NOVEMBER 8, 1965,
PROTESTING AGAINST AN AWARD TO HEIN-WERNER CORPORATION UNDER INVITATION
FOR BIDS NO. KC-D-F-51660, ISSUED BY THE GENERAL SERVICES
ADMINISTRATION, FEDERAL SUPPLY SERVICE, KANSAS CITY, MISSOURI, ON
SEPTEMBER 24, 1965.
THE INVITATION PROVIDED FOR A 100 PERCENT SMALL BUSINESS SET-ASIDE
FOR 180 HYDRAULIC JACK KITS, HAND. PRIOR TO THE BID OPENING YOU ADVISED
GSA THAT THERE WAS ONLY ONE SMALL BUSINESS MANUFACTURING SOURCE FOR THIS
EQUIPMENT, NAMELY, HEIN-WERNER CORPORATION. GSA NEVERTHELESS DECIDED
TO CONTINUE THE SET-ASIDE, AND BIDS WERE OPENED, AS SCHEDULED, ON
OCTOBER 14, 1965. THERE WERE FOUR BIDDERS:
CHART
BIDDER PER UNIT
HEIN-WERNER CORPORATION $ 87.95
BLACKHAWK MANUFACTURING CORPORATION $ 89.40
BAILEY MOTOR EQUIPMENT COMPANY $113.53
R AND O TOOL COMPANY $136.50
ONLY HEIN-WERNER AND R AND O TOOL COMPANY ARE SMALL BUSINESS
CONCERNS. YOU REPORT THAT R AND O TOOL BID ON HEIN-WERNER EQUIPMENT AND
BAILEY BID ON YOUR EQUIPMENT. GSA STATES THAT ALTHOUGH IT DOES NOT
CONTEMPLATE RESTRICTING THIS ITEM TO SMALL BUSINESS CONCERNS IN FUTURE
PROCUREMENTS, IT BELIEVES THAT HEIN-WERNER HAS SUBMITTED A REASONABLE
LOW BID WHICH SHOULD BE ACCEPTED.
YOU SAY THAT RATHER THAN BID A COMPETITIVE OR EVEN AN UNREALISTICALLY
LOW PRICE, YOU BID A HIGHER PRICE THINKING THAT THE SMALL BUSINESS
RESTRICTION WOULD BE REMOVED PRIOR TO BID OPENING AND THAT YOU WOULD BE
IN A POSITION TO MODIFY YOUR BID. WE CANNOT AGREE WITH THE LOGIC OF
THIS REASONING. THE PRICE YOU BID IS SO CLOSE TO THAT OF THE LOW BIDDER
THAT YOU HAVE CREATED THE APPEARANCE OF A SITUATION IN WHICH YOU DID IN
FACT SUBMIT A COMPETITIVE PRICE WHICH WOULD NOT HAVE BEEN THE LOW BID IN
THE ABSENCE OF THE SMALL BUSINESS SET-ASIDE.
A PROCUREMENT SHOULD NOT BE SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS
UNLESS THERE IS A REASONABLE EXPECTATION THAT ADEQUATE COMPETITION WILL
BE OBTAINED. FPR 1-1.706-5. IT NOW APPEARS THAT THERE IS INADEQUATE
SMALL BUSINESS COMPETITION. YOUR FIRM BELIEVED BEFORE BID OPENING THAT
ADEQUATE SMALL BUSINESS COMPETITION WOULD NOT BE RECEIVED. WE CANNOT
SAY, HOWEVER, THAT IT WAS UNREASONABLE TO EXPECT COMPETITION FROM SMALL
BUSINESS AT THE TIME THE SET-ASIDE WAS INITIATED. THIS WAS THE FIRST
PROCUREMENT OF THIS ITEM BY THE GSA PURCHASING OFFICE IN KANSAS CITY.
THE SMALL BUSINESS ADMINISTRATION REQUESTED THE SET ASIDE. THE GSA
OFFICIALS DECIDED THAT SMALL BUSINESS COMPETITION PROBABLY COULD BE
OBTAINED IF THE PROCUREMENT WERE FULLY PUBLICIZED. ACCORDINGLY, A
GSA-SBA JOINT SET-ASIDE DETERMINATION WAS MADE ON SEPTEMBER 22, 1965.
YOU CONTEND THAT THE SET-ASIDE SHOULD NOW BE WITHDRAWN. FPR
1-1.706-3 (B) PROVIDES THAT A SMALL BUSINESS SET-ASIDE SHOULD BE
WITHDRAWN PRIOR TO AWARD WHERE THE CONTRACTING OFFICER CONSIDERS THAT
PROCUREMENT OF THE SET-ASIDE PORTION FROM A SMALL BUSINESS CONCERN WOULD
BE DETRIMENTAL TO THE PUBLIC INTEREST, E.G., BECAUSE OF UNREASONABLE
PRICE. FPR 1-1.706 (B). ON THREE PRIOR PROCUREMENTS, YOU OBTAINED
AWARDS FOR SIX UNITS AT $97.81, FOR 12 UNITS AT $94.81, AND FOR ONE UNIT
AT $162.50. THERE IS NO RECENT GOVERNMENT AWARD INVOLVING A QUANTITY
COMPARABLE TO 180 UNITS. THE CONTRACTING OFFICER BELIEVES THAT THE LOW
BID IS REASONABLE. WE HAVE NO BASIS TO DISPUTE HIS JUDGMENT. AN
INVITATION SHOULD NOT BE CANCELLED AFTER BIDS HAVE BEEN EXPOSED EXCEPT
FOR COGENT REASON. 43 COMP. GEN. 533, 538. WE SEE NO COGENT REASON FOR
CANCELLING.
B-158034, DEC. 6, 1965
TO CAPTAIN R. A. GARDNER, USAF:
ON SEPTEMBER 28, 1965, YOUR REFERENCE WCMAP, YOU REQUESTED OUR
DECISION WHETHER YOU MAY PAY THE VOUCHER SUBMITTED BY MR. WARREN I.
FAIRMAN, A FORMER EMPLOYEE OF THE DEPARTMENT OF THE AIR FORCE, FOR
REIMBURSEMENT OF CERTAIN EXPENSES HE INCURRED IN TRAVEL ON PERMANENT
CHANGE OF STATION FROM WIESBADEN, GERMANY, TO LAJES FIELD, AZORES.
MR. FAIRMAN AND HIS FAMILY DEPARTED WIESBADEN ON AUGUST 23, 1964, BY
PRIVATELY-OWNED AUTOMOBILE AND ON AUGUST 26 REACHED LISBON, PORTUGAL.
THEY TRAVELED BY COMMERCIAL AIR FROM LISBON TO LAJES FIELD VIA SANTA
MARIA, AZORES ON AUGUST 27. TICKETS FOR TRAVEL FROM LISBON TO SANTA
MARIA WERE OBTAINED WITH A UNITED STATES OF AMERICA TRANSPORTATION
REQUEST ISSUED BY THE DEPARTMENT OF THE AIR FORCE FOR THAT PART OF THE
TRAVEL. MR. FAIRMAN SEEKS REIMBURSEMENT OF THE AMOUNTS HE PAID FOR AIR
FARE FROM SANTA MARIA TO LAJES FIELD, PASSPORTS FOR ENTRY TO THE AZORES,
AND TAXI FARES TO THE AIRPORT IN LISBON. REIMBURSEMENT OF THOSE COSTS
HAS NOT BEEN ALLOWED BECAUSE THE CONSTRUCTIVE COST OF DIRECT TRAVEL FROM
WIESBADEN TO LAJES FIELD USING MILITARY AIR TRANSPORT SERVICE (MATS)
RATES PLUS PER DIEM APPLICABLE TO TRAVEL BY THAT MODE WAS COMPUTED BY
YOU AS $296, AN AMOUNT LESS THAN THE AMOUNT PAID BY THE GOVERNMENT FOR
THE PURCHASE OF COMMERCIAL TRANSPORTATION FROM LISBON TO SANTA MARIA
WHICH WAS $320. MR. FAIRMAN WAS ASKED TO REFUND THE EXCESS COST OF THE
COMMERCIAL TRANSPORTATION PURCHASED BY THE GOVERNMENT OR $24.
THE QUESTION PRESENTED IS WHETHER THE CONSTRUCTIVE COST OF MR.
FAIRMAN'S TRAVEL MUST BE COMPUTED ON THE BASIS OF MATS RATES OR WHETHER
THE CONSTRUCTIVE COST MAY BE COMPUTED ON THE BASIS OF COMMERCIAL RATES
FOR ALL OR PART OF THE TRAVEL. SINCE COMMERCIAL RATES ARE SUBSTANTIALLY
HIGHER THAN MATS RATES MR. FAIRMAN WOULD BE ENTITLED TO REIMBURSEMENT OF
AT LEAST PART OF THE COSTS HE INCURRED IF THE LATTER METHOD OF
COMPUTATION IS PROPER IN THE CIRCUMSTANCES.
SINCE THERE WAS NO DETERMINATION THAT MR. FAIRMAN'S USE OF HIS
PRIVATELY-OWNED AUTOMOBILE WAS ADVANTAGEOUS TO THE GOVERNMENT EITHER IN
HIS TRAVEL ORDERS OR IN AIR FORCE REGULATIONS OF GENERAL APPLICATION THE
ACTUAL COSTS HE INCURRED IN TRAVELING TO HIS NEW DUTY STATION MAY BE
PAID BY THE GOVERNMENT ONLY TO THE EXTENT THAT THEY DO NOT EXCEED THE
CONSTRUCTIVE COST FOR TRAVEL BY THE ROUTE AND MODE OF TRAVEL HE WOULD
HAVE USED HAD HE NOT ELECTED TO TRAVEL BY PRIVATELY-OWNED AUTOMOBILE.
UNDER APPLICABLE AIR FORCE REGULATIONS THE USE OF MATS SCHEDULED
TRANSPORTATION TO, FROM OR BETWEEN OVERSEAS LOCATIONS IS REQUIRED IF
AVAILABLE. AFM 75-4, PARA. 2208; AFM 40-10, CH. 6, IN FORCE AT THE
TIME TRAVEL WAS PERFORMED. SINCE SPACE WAS AVAILABLE ON SCHEDULED MATS
FLIGHTS
BETWEEN FRANKFURT (WHICH IS ONLY A SHORT DISTANCE FROM WIESBADEN) AN
LAJES FIELD, MR. FAIRMAN WOULD HAVE BEEN REQUIRED TO TRAVEL BY MATS
RATHER THAN BY COMMERCIAL AIR HAD HE TRAVELED DIRECTLY FROM HIS OLD POST
TO HIS NEW POST. THE ACTION OF THE TRANSPORTATION OFFICER IN ISSUING A
TRANSPORTATION REQUEST FOR THE PURCHASE OF COMMERCIAL TRANSPORTATION FOR
PART OF THE TRIP WOULD HAVE BEEN PROPER IF THE COST WHICH WOULD HAVE
BEEN INCURRED FOR TRAVEL VIA GOVERNMENT AIRCRAFT. IN VIEW OF THE
REQUIREMENTS OF AIR FORCE REGULATIONS RELATIVE TO THE USE OF MATS
SCHEDULED FLIGHTS AND SINCE NO SPECIFIC JUSTIFICATION FOR USE OF
COMMERCIAL TRANSPORTATION WAS ISSUED BY THE TRANSPORTATION OFFICER AT
THE TIME HE ISSUED MR. FAIRMAN A TRANSPORTATION REQUEST IT MUST BE
ASSUMED THAT THE REQUEST WAS MISTAKENLY ISSUED UNDER THE ASSUMPTION THAT
THE COST OF COMMERCIAL TRAVEL AUTHORIZED THEREBY WOULD NOT EXCEED THE
TOTAL COST OF TRAVEL BY MATS. THERE IS NO INDICATION THAT THE
TRANSPORTATION OFFICER INTENDED TO AUTHORIZE MR. FAIRMAN AND HIS FAMILY
TO TRAVEL BY COMMERCIAL AIR FROM WIESBADEN TO LAJES FIELD.
THEREFORE, MR. FAIRMAN IS NOT ENTITLED TO REIMBURSEMENT OF THE COSTS
HE CLAIMS IN THE VOUCHER IN QUESTION AND IS INDEBTED TO THE GOVERNMENT
FOR THE $24 EXCESS PAID BY THE GOVERNMENT ON THE TRANSPORTATION REQUEST
ISSUED.
B-153472, DEC. 2, 1965
TO THE SECRETARY OF THE AIR FORCE:
REFERENCE IS MADE TO A LETTER DATED AUGUST 21, 1964, WITH ENCLOSURES,
FROM THE CHIEF, TRANSPORTATION, LOSS, AND DAMAGE DIVISION, DIRECTORATE
OF ADJUDICATION, AIR FORCE ACCOUNTING AND FINANCE CENTER, CONCERNING THE
CLAIM OF SOUTHEASTERN, INC., TULSA, OKLAHOMA, FOR ADDITIONAL PAYMENT
UNDER CONTRACT NO. AF 34/612/-281.
SOUTHEASTERN, INC., EXECUTED THE CONTRACT ON APRIL 8, 1958, WITH THE
DEPARTMENT OF THE AIR FORCE, TOGETHER WITH CERTAIN MORTGAGEES FOR THE
CONSTRUCTION OF 700 HOUSING UNITS UNDER THE CAPEHART HOUSING PROGRAM.
THE WORK WAS DIVIDED INTO FOUR MORTGAGE AREA PROJECTS WHICH OCCUPIED
APPROXIMATELY 300 ACRES OF LAND LOCATED AT THE ALTUS AIR FORCE BASE,
OKLAHOMA, AND INCLUDED THE ON-SITE UTILITIES, STREETS AND SIDEWALKS.
CONSTRUCTION WAS COMPLETED AND FINAL RELEASES WERE EXECUTED BY
SOUTHEASTERN AT THE CLOSING OF THE MORTGAGE AREAS DURING THE SUMMER OF
1959, THE LAST ONE BEING CLOSED OUT ON AUGUST 17, 1959. AT THAT TIME
SOUTHEASTERN WAS PAID $10,732,599, WHICH INCLUDED INCREASES FOR VARIOUS
CHANGES REQUIRED DURING THE COURSE OF CONSTRUCTION.
THE RELEASE FOR MORTGAGE AREA NO. 10, IN PERTINENT PART, READS AS
FOLLOWS:
"THE UNDERSIGNED, ELIGIBLE BUILDER OF A CAPEHART HOUSING PROJECT, THE
SAME BEING FHA PROJECT NO. 117-81010 AIR NO. 10, ALTUS AIR FORCE BASE,
OKLAHOMA, CONSTRUCTED AND ERECTED UNDER HOUSING CONTRACT NO. AF 34
(612/-281 HEREBY RELEASES ALTUS AFB HOUSING NO. TWO, INC.,
MORTGAGOR-BUILDER, AND THE DEPARTMENT OF THE AIR FORCE FROM ANY AND ALL
CLAIMS AGAINST THEM OR ANY OF THEM ARISING UNDER AND BY VIRTUE OF THE
SAID HOUSING CONTRACT, EXCEPT AS STATED IN EXHIBIT "A" ATTACHED ETO.'
RELEASES FOR THE REMAINING MORTGAGE AREAS WERE SIMILAR EXCEPT FOR THE
NUMBERS PERTAINING TO THE MORTGAGE AREAS AND MORTGAGE-BUILDER
CORPORATIONS AND THE DATES OF EXECUTION. THESE RELEASES WERE EXECUTED
SUBJECT TO RESERVATIONS TOTALING $318,000 AS FOLLOWS:
TABLE
PROJECT PROJECT PROJECT PROJECT
AREA 10 AREA 11 AREA 2 AREA 12 1. SALES TAXES PAID
$30,000 $30,000 $30,000 $60,000
STATE OF OKLAHOMA 2. ADDITIONAL FEES DUE 7,500 7,500
FOR DELAY 30,000 30,000 30,000 63,000
CAUSED BY ACTS OF
GOVERNMENT DURING
CONSTRUCTION
-------- -------- --------- ---------
$67,500 $67,500 $60,000 $123,000
ON AUGUST 2, 1961, SOUTHEASTERN FILED AN APPEAL WITH THE ARMED
SERVICES BOARD OF CONTRACT APPEALS (ASBCA NOS. 7677 AND 8614) FROM A
DECISION OF THE CONTRACTING OFFICER DATED JULY 20, 1961, WHICH DENIED 9
OF 14 CLAIMS BY THE CONTRACTOR IN CONNECTION WITH THE CONTRACT.
SUBSEQUENTLY, THE CONTRACTING OFFICER DISALLOWED THE FIVE REMAINING
CLAIMS ALSO. THE CONTRACTOR THEN FILED A SECOND NOTICE OF APPEAL WITH
THE BOARD ON SEPTEMBER 21, 1962. THE TWO APPEALS WERE CONSOLIDATED FOR
CONSIDERATION. THE BOARD, IN A DECISION DATED SEPTEMBER 23, 1963,
ALLOWED THREE OF THE CONTRACTOR'S CLAIMS (NOS. 4, 5, AND 6). ON
FEBRUARY 8, 1964, SOUTHEASTERN MADE THE SUBJECT CLAIM TO THE GENERAL
ACCOUNTING OFFICE IN THE TOTAL AMOUNT OF $205,973.77 COVERING FOUR
SEPARATE ITEMS IDENTIFIED AS CLAIMS 2, 8, 10, AND 11.
CLAIM 2 IS FOR REIMBURSEMENT OF SALES AND USE TAXES TOTALING
$117,079.77 ASSESSED AGAINST THE CONTRACTOR BY THE STATE OF OKLAHOMA.
THE ARMED SERVICES BOARD OF CONTRACT APPEALS DENIED THIS CLAIM ON THE
BASIS THAT THE STANDARD TAX CLAUSE IN THE CONTRACT PLACED THE ONUS FOR
PAYMENT OF SUCH TAX ON THE CONTRACTOR AND THAT TO SET THIS CLAUSE ASIDE
ON THE GROUNDS PRESENTED BY THE CLAIMANT WOULD REQUIRE THE EXERCISE OF
AUTHORITY TO REFORM THE CONTRACT, WHICH THE BOARD LACKS.
IN CONNECTION WITH CLAIM 2, PERTINENT PARTS OF THE INVITATION FOR
BIDS READ AS FOLLOWS:
"11. THE DOLLAR AMOUNT OF THE ACCEPTABLE BID WILL BE DIVIDED, FOR
MORTGAGE PURPOSES, IN THE SAME PROPORTION AS THE FHA TOTAL ESTIMATED
REPLACEMENT COST FOR EACH PROPERTY OR PROJECT AS SHOWN IN EACH OF THE 4
FINAL APPRAISAL AND ELIGIBILITY STATEMENTS ISSUED BY THE FEDERAL HOUSING
COMMISSIONER, COPIES OF EACH BEING ATTACHED HERETO FOR YOUR INFORMATION.
"12. BIDDERS ARE ADVISED THAT THE MAXIMUM TOTAL OF THE INSURABLE
MORTGAGES MAY NOT EXCEED THE LESSER OF THREE ITEMS BEING (1) AMOUNT OF
THE LOWEST ACCEPTABLE BID, (2) FHA TOTAL OF THE ESTIMATED REPLACEMENT
COST OF THE PROPERTY OR PROJECTS OR (3) AN AVERAGE PER FAMILY UNIT OF
$16,500 LESS THE ESTIMATED VALUE OF ANY USABLE UTILITIES WITHIN THE
PROPERTY OR PROJECTS WHERE OWNED BY THE DEPARTMENT OR FURNISHED BY OTHER
THAN MORTGAGE PROCEEDS. ATTENTION IS INVITED TO FHA'S FINAL APPRAISAL
AND ELIGIBILITY STATEMENTS ATTACHED HERETO. THE BIDDER WILL BE REQUIRED
TO PAY THE FEES AND COSTS PRESCRIBED IN SUCH STATEMENTS.
"16. NOTHING IN THIS INVITATION FOR BIDS SHALL BE DEEMED TO RELIEVE
THE ELIGIBLE BUILDER OF ANY LIABILITY FOR THE PAYMENT OF SALES OR USE
TAXES PROPERLY LEVIED.
"30. BIDDERS ARE CAUTIONED THAT THE NUMBERED PROVISIONS OF THIS
INVITATION FOR BIDS ARE TO BE READ IN CONNECTION WITH THE PROVISIONS OF
ALL OTHER DOCUMENTS ATTACHED HERETO OR IDENTIFIED EIN.'
PARAGRAPH 41 (B) OF THE HOUSING CONTRACT, A COPY OF WHICH WAS
ATTACHED TO THE INVITATION FOR BIDS READS AS FOLLOWS:
"EXCEPT AS MAY BE OTHERWISE PROVIDED IN THIS HOUSING CONTRACT, THE
CONTRACT PRICE INCLUDES ALL FEDERAL, STATE AND LOCAL TAXES AND DUTIES IN
EFFECT AND APPLICABLE TO THIS HOUSING CONTRACT ON THE CONTRACT DATE,
EXCEPT TAXES FROM WHICH THE ELIGIBLE BUILDER OR THE TRANSACTIONS OR
PROPERTY COVERED BY THIS HOUSING CONTRACT ARE THEN EXEMPT. DUTIES AND
FEDERAL TRANSPORTATION TAXES ARE INCLUDED IN THE CONTRACT PRICE UNLESS
OTHERWISE SPECIFICALLY EXCLUDED.'
ALSO ATTACHED TO THE INVITATION FOR BIDS WERE THE FINAL APPRAISAL AND
ELIGIBILITY STATEMENTS FOR THE FOUR AREAS INVOLVED, WHICH WERE PREPARED
BY THE FEDERAL HOUSING ADMINISTRATION IN THE NAME OF THE FEDERAL HOUSING
COMMISSIONER. SCHEDULE B OF EACH CONTAINED A LIST OF 13 ITEMS OF COSTS
AND FEES TO BE INCLUDED BY THE BIDDER IN HIS TOTAL BID. FOR 12 OF THE
13 ITEMS THE GOVERNMENT PROVIDED AN AMOUNT TO BE USED BY THE BIDDER.
HOWEVER, THE ITEM NUMBERED 11 WAS ENTITLED "SALES TAXES (WHERE
APPLICABLE)," AND IN THE SPACE PROVIDED FOR AN AMOUNT OPPOSITE THIS ITEM
THE GOVERNMENT HAD INSERTED AN "X," RATHER THAN AN AMOUNT.
THE CLAIMANT HAS SUBMITTED EVIDENCE SHOWING THAT IT INTERPRETED SUCH
OMISSION OF AN AMOUNT FOR SALES TAXES, COUPLED WITH THE INSERTION OF AN
"X" IN THE SPACE OPPOSITE ITEM 11 ON THE FINAL APPRAISAL AND ELIGIBILITY
STATEMENTS, AND THE ADVICE ON THE BID FORM THAT BIDDERS WOULD BE
REQUIRED TO PAY THE FEES AND COSTS PRESCRIBED IN THE FINAL APPRAISAL AND
ELIGIBILITY STATEMENT, AS CONSTITUTING NOTICE FROM THE GOVERNMENT THAT
SALES TAXES WERE NOT APPLICABLE AND AS SUCH WERE NOT TO BE INCLUDED IN
ITS BID. THE CLAIMANT ALSO ALLEGES THAT, PRIOR TO SIGNING THE CONTRACT,
IT WAS TOLD BY THE REGIONAL FHA COMMISSIONER AND THE CONTRACTING OFFICER
THAT SALES TAXES WERE NOT TO BE INCLUDED IN THE CONTRACT PRICE.
BEGINNING IN JANUARY OF 1959, ASSESSMENT WAS MADE BY THE STATE OF
OKLAHOMA FOR SALES AND USE TAXES. SOUTHEASTERN INFORMED THE REGIONAL
FHA COMMISSIONER OF THE ASSESSMENT, AND BY LETTER DATED JANUARY 13,
1959, TO THE CLAIMANT, THE REGIONAL FHA COMMISSIONER STATED THE
FOLLOWING:
"IN REPLY TO YOUR QUESTION BY TELEPHONE TODAY PERTAINING TO STATE
SALES TAX ON MATERIALS USED IN THE CONSTRUCTION OF HOUSING FOR THE AIR
CORPS ON THE ALTUS AIR FORCE BASE, PLEASE BE ADVISED SALES TAX IS NOT
TAKEN INTO CONSIDERATION IN MAKING OUR ESTIMATE OF COST.
"IN NO INSTANCE OF THIS KIND HAVE WE EVER INCLUDED STATE SALES TAX,
IT BEING OUR UNDERSTANDING THAT SUCH TAX IS NOT CHARGEABLE TO THE
FEDERAL GOVERNMENT AND THESE HOUSES ARE BEING BUILT UNDER CONTRACT FOR A
BRANCH OF THE FEDERAL GOVERNMENT.'
AFTER UNSUCCESSFULLY CONTESTING THE APPLICABILITY OF THE TAXES IN THE
STATE COURTS, SOUTHEASTERN WAS OBLIGED TO PAY THEM IN FULL. SEE
SOUTHEASTERN, INC., V. OKLAHOMA TAX COMMISSION, 351 P.2D 739.
FROM OUR REVIEW OF THE AVAILABLE RECORDS WE ARE CONVINCED THAT THE
CONTRACTOR DID NOT INCLUDE THE STATE SALES TAXES IN ITS BID PRICE.
FURTHER, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTOR ACTED
UNREASONABLY IN INTERPRETING THE MANNER IN WHICH THE FINAL APPRAISAL AND
ELIGIBILITY STATEMENTS WERE PREPARED AS A REPRESENTATION BY THE
GOVERNMENT THAT SUCH TAXES WERE NOT APPLICABLE TO A CONTRACTOR'S
PURCHASES OF SUPPLIES UNDER THE CONTRACT IN QUESTION. IN THIS
CONNECTION, IT SHOULD BE NOTED THAT THE TOTAL ESTIMATED REPLACEMENT COST
AS SHOWN ON THE FINAL APPRAISAL AND ELIGIBILITY STATEMENT CONSTITUTED A
CEILING ON THE MAXIMUM INSURABLE MORTGAGE, AND ON THE MAXIMUM ACCEPTABLE
BID PRICE. SINCE, IT HAS NOW BEEN DETERMINED THAT THE TAXES ARE
APPLICABLE, IT MUST BE CONCLUDED THAT THE PLACING OF "X" AS THE AMOUNT
OF "SALES TAXES (WHERE APPLICABLE)" IN ITEM 11 CONSTITUTED A
MISREPRESENTATION ON THE PART OF THE GOVERNMENT, EVEN THOUGH IT WAS NOT
DELIBERATE.
UNDER THE CIRCUMSTANCES THERE IS FOR CONSIDERATION THE PRINCIPLE OF
LAW THAT MISTAKE ON ONE SIDE AND MISREPRESENTATION ON THE OTHER SIDE,
WHETHER WILLFUL OR ACCIDENTAL, CONSTITUTES A GROUND FOR REFORMATION WHEN
THE PARTY DECEIVED HAS RELIED ON THE MISREPRESENTATION OF THE OTHER
PARTY. WHERE, AS IN THE INSTANT CASE, THIS OCCURS, RESTITUTION MAY BE
OBTAINED ON THE PREMISE THAT IT WOULD BE UNJUST TO ALLOW ONE WHO MADE
THE MISREPRESENTATION, THOUGH INNOCENTLY, TO RETAIN THE FRUITS OF A
BARGAIN WHICH WAS INDUCED, IN WHOLE OR IN PART, BY SUCH
MISREPRESENTATION. SEE WILLISTON ON CONTRACTS, REV.ED., SECTIONS 1500
AND 1509, AND THE CASES THEREIN CITED; VIRGINIA ENGINEERING CO., INC.,
V. UNITED STATES, 101 CT.CLS. 516; HARRISON ENGINEERING AND
CONSTRUCTION CORPORATION V. UNITED STATES, 107 CT.CLS. 205. FALSE
INFORMATION AS TO A MATTER OF LAW, EVEN IF GIVEN IN GOOD FAITH, MAY
CONSTITUTE GROUNDS FOR REFORMATION. STAFFORD V. CALIFORNIA CANNING
PEACH GROWERS, 78 P.2D. 1150. INASMUCH AS THE CONTRACTOR IN THE INSTANT
CASE RELIED ON THE GOVERNMENT'S
MISREPRESENTATION TO HIS DETRIMENT, AND THE GOVERNMENT HAS BENEFITED
TO THE SAME EXTENT, WE ARE OF THE VIEW SUCH CIRCUMSTANCES CONSTITUTE A
BASIS FOR CONTRACT REFORMATION. 76 C.J.S., REFORMATION OF INSTRUMENTS,
SECTION 29.
ACCORDINGLY, WE ARE TODAY INSTRUCTING OUR CLAIMS DIVISION TO ALLOW
THE CLAIM OF SOUTHEASTERN CORPORATION FOR THE AMOUNT OF THE SALES TAXES
IT WAS REQUIRED TO PAY.
CLAIM 8 IS BASED ON THE EXTRA COST OF SUBSTITUTING YELLOW PINE BOARDS
FOR LINDERMAN PROCESSED ROOF SHEATHING BECAUSE IT WAS FOUND AFTER USE OF
THE SHEATHING THAT IT WAS UNSUITABLE. CLAIM 10 IS BASED ON EXTRA WORK
IN CONNECTION WITH INSTALLATION OF AN ADDITIONAL ELECTRICAL RECEPTACLE
IN KITCHENS. CLAIM 11 IS BASED ON AN ALLEGED DISCREPANCY IN
SPECIFICATIONS WITH REGARD TO MEDICINE CABINETS.
PARAGRAPH 14 (D) OF THE HOUSING CONTRACT PROVIDES AS FOLLOWS:
"UPON COMPLETION AND ACCEPTANCE OF ALL WORK REQUIRED HEREUNDER, THE
AMOUNTS DUE THE ELIGIBLE BUILDER UNDER THIS HOUSING CONTRACT FROM
MORTGAGE PROCEEDS WILL BE PAID BY THE MORTGAGOR-BUILDER. FINAL AMOUNTS
SHALL BE PAYABLE AFTER THE ELIGIBLE BUILDER SHALL HAVE FURNISHED THE
MORTGAGOR-BUILDER AND THE DEPARTMENT WITH A RELEASE, IF REQUIRED, OF ALL
CLAIMS AGAINST THE DEPARTMENT AND/OR THE MORTGAGOR-BUILDER ARISING UNDER
AND BY VIRTUE OF THIS HOUSING CONTRACT, OTHER THAN SUCH CLAIMS, IF ANY,
AS MAY BE SPECIFICALLY EXCEPTED BY THE ELIGIBLE BUILDER FROM THE
OPERATION OF THE RELEASE IN AMOUNTS STATED THEREIN. ALL PAYMENTS SHALL
BE SUBJECT TO REDUCTION FOR OVERPAYMENTS OR INCREASE FOR UNDERPAYMENTS
ON PRECEDING PAYMENTS OF THE ELIGIBLE BUILDER. ANY OVERPAYMENTS TO THE
ELIGIBLE BUILDER SHALL, UNLESS OTHERWISE ADJUSTED, BE REPAID UPON
DEMAND.'
THE CLAIMANT URGES THAT THE TERM "DELAYS," AS USED IN THE EXCEPTIONS
SET OUT IN THE RELEASES IT EXECUTED, WAS INTENDED TO ENCOMPASS CHANGES,
SO AS TO INCLUDE THE THREE CLAIMS IN QUESTION THEREUNDER. HOWEVER,
PARAGRAPH 14 (D) OF THE HOUSING CONTRACT STATES THAT ONLY SUCH CLAIMS
MAY BE RESERVED AS ARE SPECIFICALLY EXCEPTED. WE FIND NO SPECIFIC
RESERVATIONS IN THE RELEASES FOR CHANGES. IN FACT, THE RECORD INDICATES
THAT THE ATTORNEY FOR CLAIMANT WHO DRAFTED THE RELEASES STATED AS
FOLLOWS:
"I WAS JUST TRYING TO RESERVE THE RIGHTS OF THOSE PEOPLE IN THE MOST
GENERAL AND UNSPECIFIC WAY THAT I COULD. THERE WAS NOTHING IN THE WAY
OF A COMPLAINT OR ITEMIZATION OF DAMAGE, IT WAS A GENERAL RESERVATION OF
RIGHTS.'
SEE PAGE 321 OF THE TRANSCRIPT OF PROCEEDINGS BEFORE THE ARMED
SERVICES BOARD OF CONTRACT APPEALS.
WE THEREFORE AGREE WITH THE ARMED SERVICES BOARD OF CONTRACT APPEALS
THAT ALL OF THESE CLAIMS ARE BARRED BY THE RELEASES SIGNED BY THE
CLAIMANT.
B-156662, DEC. 2, 1965
TO DERA, INCORPORATED:
BY LETTER DATED APRIL 27, 1965, YOU PROTESTED AN AWARD BY THE
SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA, OF A
CONTRACT FOR ENGINE DRIVEN GENERATOR SETS (EACH CONSISTING OF A GASOLINE
ENGINE AND A D.C. GENERATOR) TO FAIRBANKS MORSE, INCORPORATED, UNDER
INVITATION FOR BIDS NO. 04-606-65-109. YOU CONTEND THAT, AS THE LOWEST
BIDDER, YOU WERE UNJUSTIFIABLY DENIED THE AWARD.
THE CONTRACTING OFFICER REJECTED YOUR BID AS NONRESPONSIVE BECAUSE
YOU PROPOSED TO DELIVER A GENERATOR OF YOUR OWN DESIGN AND BECAUSE THE
SET OF BLUE-LINE DRAWINGS WHICH ACCOMPANIED IT WERE CONCLUDED BY
GOVERNMENT ENGINEERS TO BE INCOMPLETE AND DESCRIPTIVE OF AN ITEM NOT
MEETING THE GOVERNMENT'S REQUIREMENTS. THE A210 GENERATOR SET BEING
PROCURED WAS DESIGNED FOR INSTALLATION IN, AND TO BE FULLY COMPATIBLE
WITH, THE 010, 011A AND 011B CRASH, FIRE AND RESCUE TRUCKS. GENERATOR
SETS WERE TO BE MANUFACTURED IN CONFORMITY WITH A REPRESENTATIVE SAMPLE
AVAILABLE TO BIDDERS WHICH WOULD BE BAILED TO THE CONTRACTOR AFTER
AWARD, AND GENERATORS WERE TO BE STRICTLY IN ACCORDANCE WITH AIR FORCE
DRAWING NO. 63D42031. ALTHOUGH THE INVITATION, AS ORIGINALLY WORDED,
MAY HAVE PERMITTED BIDDERS TO PREDICATE THEIR OFFERS ON GENERATORS EQUAL
TO THE UNIT DESCRIBED IN THE DRAWING, THIS PRIVILEGE WAS RESCINDED BY
AMENDMENT NO. 1 WHICH MADE IT CLEAR THAT ONLY THE BRIGGS AND STRATTON
ENGINE AND CERTAIN MINOR COMPONENTS COULD BE SUPPLIED ON AN "OR EQUAL"
BASIS.
WE ARE GIVEN TO UNDERSTAND THAT THE DRAWINGS FURNISHED BIDDERS ALONG
WITH THE INVITATION WERE COMPLETELY ADEQUATE TO ENABLE MANUFACTURE OF
THE UNIT REQUIRED BY THE GOVERNMENT.
THE DRAWINGS AND DATA SUBMITTED WITH YOUR BID WERE FOUND NOT TO MEET
THE ESSENTIAL REQUIREMENTS OF THE INVITATION FOR THE FOLLOWING REASONS,
AMONG OTHERS:
(1) THERE WAS NO INFORMATION INCLUDED REGARDING THE METHOD OF
ATTACHING THE UNIT TO THE FIRE TRUCK SO AS TO ASSURE COMPATIBILITY TO
THE PECULIAR DIMENSIONS OF THE GENERATOR SET COMPARTMENT (TAKING
PROTRUDING OBJECTS INTO CONSIDERATION), THE CONTROL PANEL, EXHAUST
PIPES, FUEL LINES, AND GENERATOR TO TRUCK WIRING;
(2) YOUR DRAWINGS WERE ONLY OUTLINE SKETCHES WHICH FAILED TO
ESTABLISH EXACTLY WHAT YOU PROPOSED TO FURNISH AND WHAT THE GOVERNMENT
WOULD BE BINDING ITSELF TO PURCHASE BY MAKING AN WARD;
(3) THE BROCHURE AND DRAWINGS SUBMITTED WITH THE BID WERE FOR A.C.
GENERATOR SETS WHEREAS THE REQUIREMENT WAS FOR D.C. GENERATOR SETS, AND
ALTHOUGH YOU LATER EXPLAINED THAT D.C. CATALOG SHEETS WERE NOT IN STOCK
AT THE TIME OF BID SUBMISSION, THE TERMS OF AN OFFER TO SELL TO THE
GOVERNMENT MUST BE COMPLETELY REVEALED ON THE FACE OF THE BID, IF THE
PROPOSAL IS TO RECEIVE FAVORABLE CONSIDERATION (SEE 41 COMP. GEN. 366);
(4) YOUR BROCHURE DID NOT SHOW COMPLIANCE WITH THE SPECIFICATION
REQUIREMENT FOR ELECTRIC CRANKING OF THE ENGINE.
YOU CONTEND THAT THE ADVERTISED SPECIFICATIONS WERE RESTRICTIVE TO
THE PRODUCT OF FAIRBANKS MORSE, INCORPORATED. THE STATUTES GOVERNING
FEDERAL PROCUREMENT HAVE BEEN CONSTRUED TO REQUIRE THAT ADVERTISED
SPECIFICATIONS BE SO DRAWN AS TO PERMIT THE MAXIMUM DEGREE OF
COMPETITION POSSIBLE CONSISTENT WITH THE NEEDS OF THE AGENCY. 38 COMP.
GEN. 610, 611. COMPETITION IS UNDULY RESTRICTED ONLY WHEN THERE IS NO
NECESSITY FOR SINGLING OUT A PRODUCT POSSESSING THE STATED PHYSICAL AND
FUNCTIONAL CHARACTERISTICS. 39 COMP. GEN. 101; 37 ID. 323.
ALTHOUGH THE GENERATOR DRAWING UTILIZED IN THIS PROCUREMENT WAS
APPARENTLY BASED ON DATA ACQUIRED FROM FAIRBANKS MORSE, INCORPORATED, ON
A PREVIOUS PURCHASE OF A210 GENERATOR SETS, THE DRAFTING OF THESE
SPECIFICATIONS SEEMS TO HAVE BEEN A QUESTION OF ADAPTING THE GENERATORS
TO THE FIRE ENGINES RATHER THAN FITTING THE SPECIFICATIONS TO THE
PRODUCT OF ONE MANUFACTURER. FURTHERMORE, HOLDING YOUR BID RESPONSIVE
WOULD HAVE FORCED THE GOVERNMENT TO ASSUME THE RISK OF ACQUIRING
GENERATOR SETS WITHOUT ASSURANCE OF THEIR SUITABILITY FOR INSTALLATION
IN THE 010, 011A AND 011B VEHICLES.
YOU HAVE ALSO OBJECTED TO THE FACT THAT THE AWARD WAS MADE TO A LARGE
BUSINESS ORGANIZATION. HOWEVER, AS YOU HAVE BEEN ADVISED, THE
INVITATION IN QUESTION WAS NOT A SMALL BUSINESS SET-ASIDE AND THEREFORE
DID NOT PRECLUDE AN AWARD TO A LARGE BUSINESS FIRM.
FOR THE REASONS OUTLINED ABOVE, WE CAN SEE NO JUSTIFICATION FOR
QUESTIONING THE AWARD TO FAIRBANKS MORSE, INCORPORATED.
B-157491, DEC. 2, 1965
TO AEROSPACE, INC. :
FURTHER REFERENCE IS MADE TO A LETTER DATED AUGUST 13, 1965, FROM MR.
HAROLD E. FIELDING, WHICH PROTESTS THE AWARD OF A CONTRACT UNDER AIR
FORCE SOLICITATION AND OFFER NO. 04-626-65-85 TO ANY BIDDER OTHER THAN
AEROSPACE, INC.
THIS SOLICITATION INVITED BIDS FOR THE FURNISHING OF LABOR, EQUIPMENT
AND MATERIALS FOR THE CLEANING, WASHING AND CORROSION CONTROL OF CERTAIN
AIRCRAFT. AEROSPACE'S BID OF $131,850.40, LESS A 15-PERCENT-10-DAY, OR
A 10-PERCENT-30-DAY CASH PAYMENT DISCOUNT, WAS THE LOWEST OF SIX BIDS
SUBMITTED.
THE CONTRACTING OFFICER REQUESTED THAT A SURVEY BE CONDUCTED TO
ASCERTAIN THE CAPABILITY OF AEROSPACE TO PERFORM THE PROPOSED CONTRACT.
AEROSPACE WAS INITIALLY ADVISED THAT ITS BID WAS REJECTED BECAUSE IT NOT
ONLY DID NOT QUALIFY UNDER PARAGRAPH I (A) OF THE SOLICITATION AND OFFER
BUT ALSO WAS NONRESPONSIVE TO THE SOLICITATION. HOWEVER, THIS WAS LATER
CORRECTED AND AEROSPACE WAS ADVISED THAT THE DETERMINING FACTOR FOR
REJECTING ITS BID WAS DUE TO NONRESPONSIBILITY RATHER THAN THE
RESPONSIVENESS OF ITS BID AND THAT THIS FINDING WAS BASED UPON REASONS
OTHER THAN CAPACITY OR CREDIT. THE CRUX OF YOUR PROTEST IS THAT THE
ADMINISTRATIVE AGENCY DOES NOT HAVE THE AUTHORITY TO DETERMINE THE
RESPONSIBILITY OF YOUR COMPANY. YOU ASSERT THAT SINCE YOU ARE A SMALL
BUSINESS CONCERN THE MATTER SHOULD HAVE BEEN REFERRED TO THE SMALL
BUSINESS ADMINISTRATION FOR CERTIFICATE OF COMPETENCY CONSIDERATION AS
TO CAPACITY AND CREDIT. YOU STATE ALSO THAT THE INTEGRITY OF AEROSPACE
IS AT ISSUE IN THIS MATTER AND THAT YOU ARE ENTITLED TO KNOW THE REASONS
FOR THE REJECTION OF YOUR BID.
THE RECORD IN THIS CASE INDICATES THAT AEROSPACE IS A NEW FIRM
WITHOUT EXPERIENCE IN THE PERFORMANCE OF THESE SERVICES, AND THAT IT
WILL RELY ALMOST COMPLETELY ON THE EXPERIENCE AND LEADERSHIP OF ITS
PRESIDENT, MR. PAUL E. SHADE. WHILE PAUL SHADE WAS PRESIDENT OF MISSILE
CONTROLS LABORATORY, INC., THAT COMPANY, IN 1964, BECAME DELINQUENT ON
SIX CONTRACTS WITH THE GOVERNMENT. THE CONTRACTING OFFICER
ADMINISTERING THOSE CONTRACTS HAS ADVISED THAT IN BIDDING ON THOSE
CONTRACTS MISSILE CONTROLS STATED THAT IT HAD FULL KNOWLEDGE OF
TECHNICAL ORDERS, ETC., TO DO THE JOB BUT THAT DURING THE PERIOD OF THE
CONTRACTS THE COMPANY CONSTANTLY REQUESTED THE CONTRACTING OFFICER TO
FURNISH SPECIFICATIONS, TECHNICAL ORDERS, ETC., MANY OF WHICH WERE THE
BASIC DOCUMENTS ON WHICH THE BUSINESS WAS TO OPERATE.
THE MATTER OF A BIDDER'S RESPONSIBILITY IS FOR DETERMINATION BY THE
ADMINISTRATIVE AGENCY AND WILL NOT BE QUESTIONED IN THE ABSENCE OF
ARBITRARINESS OR BAD FAITH, WHICH DOES NOT APPEAR TO BE THE CASE HERE.
37 COMP. GEN. 430. FURTHER, UNDER THE PROVISION OF THE ARMED SERVICES
PROCUREMENT REGULATION 1-705.4 (C), A DETERMINATION OF NONRESPONSIBILITY
FOR REASONS OTHER THAN CAPACITY OR CREDIT, AS HERE, NEED NOT BE REFERRED
TO THE SMALL BUSINESS ADMINISTRATION FOR FINAL DETERMINATION. 37 COMP.
GEN. 676; 38 ID. 864.
B-157653, DEC. 2, 1965
TO PENN ELECTRIC MOTOR COMPANY, INCORPORATED:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 9, 1965,
PROTESTING THE AWARD OF NAVY CONTRACT NO. NBY-65302 BY THE PHILADELPHIA
NAVAL SHIPYARD TO THE ARNOLD COMPANY, INCORPORATED, PHILADELPHIA,
PENNSYLVANIA.
THE RECORD SHOWS THAT ON APRIL 14, 1965, THE PHILADELPHIA NAVAL
SHIPYARD ISSUED TWO REQUESTS FOR PROPOSALS FOR REPAIR OF ELECTRIC MOTORS
AS REQUIRED AND ORDERED BY THE SHIPYARD DURING THE PERIOD JULY 1, 1965,
THROUGH JUNE 30, 1966. YOUR COMPANY WAS AWARDED THE CONTRACT FOR THE
REPAIRS DESCRIBED IN THE FIRST PROPOSAL REQUEST, IDENTIFIED AS CONTRACT
NO. NBY-65301. THAT CONTRACT CALLS FOR THE REPAIR OF MOTORS FROM 10 TO
200 HORSEPOWER. CONTRACT NO. NBY-65302, WHICH CALLS FOR THE REPAIR OF
MOTORS FROM FRACTIONAL TO 200 HORSEPOWER, WAS AWARDED TO THE ARNOLD
COMPANY, INCORPORATED, THE ONLY COMPANY WHICH SUBMITTED AN OFFER UNDER
THE SECOND PROPOSAL REQUEST. IT IS YOUR CONTENTION THAT YOUR CONTRACT
SHOULD HAVE COVERED ALL OF THE REPAIR WORK REQUIRED DURING THE FISCAL
YEAR 1966, SINCE YOU HAD OFFERED THE LOWEST PRICES FOR THE REPAIR OF
MOTORS FROM FRACTIONAL TO 200 HORSEPOWER WHEN RESPONDING TO THE FIRST
PROPOSAL REQUEST.
THE RECORD INDICATES THAT YOUR COMPANY DID NOT RECEIVE A COPY OF THE
SECOND PROPOSAL REQUEST AND ASSUMED THAT THE NAVY HAD MADE A MISTAKE IN
DESCRIBING ITS REQUIREMENTS. YOU THEREFORE STATED IN YOUR PROPOSAL
UNDER THE FIRST PROPOSAL REQUEST THAT "THIS PROPOSAL APPLIES ON ALL
MOTORS FROM FRACTIONAL TO 200 H.P. IN ALL RATINGS AND MANUFACTURE.'
SINCE THE PROPOSED CONTRACT NO. NBY-65301 SPECIFICALLY COVERED ONLY
MOTORS FROM 10 TO 200 HORSEPOWER, THE PHILADELPHIA NAVAL SHIPYARD
BELIEVED THAT IT WOULD HAVE BEEN IMPROPER TO MAKE AN AWARD TO YOUR
COMPANY FOR THE REPAIR OF ALL MOTORS RANGING FROM FRACTIONAL TO 200
HORSEPOWER, ALTHOUGH YOU HAD AGREED TO PERFORM ALL OF SUCH REPAIR WORK
WHEN SUBMITTING AN OFFER UNDER THE FIRST PROPOSAL REQUEST.
UPON ITS REVIEW OF THE MATTER, THE BUREAU OF YARDS AND DOCKS,
DEPARTMENT OF THE NAVY, HAS CONCLUDED THAT YOUR PROPOSAL TO PERFORM
SERVICES ON ALL MOTORS FROM FRACTIONAL TO 200 HORSEPOWER COULD HAVE BEEN
AND MAY NOW BE ACCEPTED BY THE GOVERNMENT. THE BUREAU HAS, ACCORDINGLY,
EVIDENCED AN INTENTION TO INCREASE THE SCOPE OF THE CONTRACT WITH YOUR
FIRM TO INCLUDE ALL MOTORS FROM FRACTIONAL TO 200 HORSEPOWER.
SINCE THE PURPOSE OF YOUR PROTEST TO OUR OFFICE IN THE MATTER
APPARENTLY WILL BE ACCOMPLISHED AT AN EARLY DATE, WE ARE CONSIDERING THE
CASE CLOSED.
B-157947, DEC. 2, 1965
TO THE HONORABLE ROBERT C. WEAVER, ADMINISTRATOR IN THE DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT:
REFERENCE IS MADE TO LETTER DATED OCTOBER 28, 1965, FROM MR. RICHARD
L. STILL, ACTING COMMISSIONER, COMMUNITY FACILITIES ADMINISTRATION,
HOUSING AND HOME FINANCE AGENCY, REQUESTING THAT CLAIMS DUE THE UNITED
STATES FOR UNREPAID ADVANCES FOR PUBLIC WORKS PLANNING BE SPECIFICALLY
EXCEPTED FROM THE DEBT REPORTING REQUIREMENT OF 4 GAO 5050.
THE RECORDS OF OUR OFFICE SHOW THAT THE NUMBER OF ADVANCE PLANNING
CLAIMS REFERRED TO THE CLAIMS DIVISION OF OUR OFFICE HAS BEEN RELATIVELY
SMALL, AND IN PRACTICALLY EVERY INSTANCE THEY HAVE BEEN REFERRED TO THE
DEPARTMENT OF JUSTICE FOR FURTHER COLLECTION ACTION. THE REASON FOR
THIS APPEARS TO BE THAT THESE ADVANCE PLANNING CLAIMS ARE CONTESTED BY
THE DEBTORS TO THE EXTENT THAT THEY CAN ONLY BE RESOLVED BY LITIGATION
OR COMPROMISE, AND NEITHER OF THESE ACTIONS COME WITHIN THE JURISDICTION
OF OUR OFFICE. ALSO, IT APPEARS THAT, PURSUANT TO SECTION 602 (B) OF
THE HOUSING ACT OF 1964, 40 U.S.C. 462 (H), WHICH GRANTS THE
ADMINISTRATOR OF THE HOUSING AND HOME FINANCE AGENCY AUTHORITY TO
TERMINATE OR MAKE EQUITABLE ADJUSTMENTS IN LIABILITY FOR REPAYMENT OF
ADVANCES FOR PUBLIC WORKS PLANNING, THE NUMBER OF CLAIMS FOR UNREPAID
PLANNING ADVANCES WILL BE EVEN SMALLER THAN IT HAS BEEN.
WE HAVE BEEN INFORMALLY ADVISED BY MR. JOHN DINSMORE, DEPUTY CHIEF
COUNSEL, COMMUNITY FACILITIES ADMINISTRATION, THAT THE DEPARTMENT OF
JUSTICE WOULD HAVE NO OBJECTION TO HAVING THESE ADVANCE PLANNING CLAIMS
REPORTED DIRECTLY TO IT FOR APPROPRIATE COLLECTION ACTION AFTER
REASONABLE
ADMINISTRATIVE EFFORTS TO COLLECT THE CLAIMS HAVE BEEN EXHAUSTED.
IN VIEW OF THE FOREGOING, IT APPEARS THAT NO USEFUL PURPOSE WILL BE
SERVED IN REFERRING ADVANCE PLANNING CLAIMS TO OUR OFFICE FOR FURTHER
COLLECTION ACTION. THEREFORE, IT IS CONCLUDED THAT UNDER THE AUTHORITY
OF 4 GAO 5050.30G AN EXCEPTION TO THE GENERAL REPORTING REQUIREMENT OF 4
GAO 5050 IS JUSTIFIED, AND YOU MAY DISCONTINUE REPORTING SUCH CLAIMS TO
THIS OFFICE.
B-113939, DEC. 1, 1965
TO KING AND KING:
REFERENCE IS MADE TO YOUR LETTERS OF MAY 11, 1965, AND MAY 26, 1965,
REQUESTING RECONSIDERATION OF THE ACTION TAKEN BY THE CLAIMS DIVISION OF
THIS OFFICE IN SETTLEMENT DATED FEBRUARY 4, 1965, DISALLOWING THE CLAIM
OF KATHRYN V. WILSON FOR INCREASED RETIRED PAY IN THE CASE OF JAMES C.
WILSON, USN, RETIRED, DECEASED, BY REASON OF ADDITIONAL CONSTRUCTIVE
SERVICE BELIEVED CREDITABLE UNDER THE HOLDING IN CALLAHAN V. UNITED
STATES, CT.CL. NO. 349-62, DECIDED FEBRUARY 14, 1964.
IN BAILEY, ET AL. V. UNITED STATES, CT.CL. NO. 588-52, A JUDGMENT
BASED ON A STIPULATION AGREEMENT WAS ENTERED DECEMBER 1, 1953, IN FAVOR
OF WILSON (PLAINTIFF NO. 44 IN THAT CASE), ALLOWING HIM INCREASED
RETIRED PAY UNDER THE BASIC RULE OF THE SANDERS CASE, 120 CT.CL. 501
(1951), PLUS FIVE PERCENTUM FOR GOOD CONDUCT MARK (BY COMPROMISE) FOR
THE PERIOD DECEMBER 4, 1946, THROUGH DECEMBER 31, 1952, INCLUSIVE.
WILSON'S CLAIM AS PLAINTIFF NO. 151 IN ABERCROMBIE, ET AL. V. UNITED
STATES, CT.CL. NO. 221-56, FOR 10 PERCENTUM INCREASE IN RETIRED PAY BY
REASON OF GOOD CONDUCT MARK FOR THE PERIOD JANUARY 1, 1953, TO DATE OF
JUDGMENT WAS DISMISSED ON ITS MERITS JULY 12, 1957, 139 CT.CL. 748,
THEREBY RAISING THE BAR OF RES JUDICATA AS TO THE PERIOD COVERED BY THAT
JUDGMENT. CONSEQUENTLY, ONLY THE PERIOD JULY 13, 1957, TO FEBRUARY 12,
1963 (DATE OF WILSON'S DEATH), IS NOW OPEN FOR CONSIDERATION OF THE
CLAIM FOR ADDITIONAL RETIRED PAY BENEFITS UNDER THE CALLAHAN RULE.
A COPY OF AUTHORIZATION FOR TRANSFER TO THE FLEET NAVAL RESERVE IN
WILSON'S CASE WAS RECEIVED WITH LETTER OF AUGUST 19, 1965, FROM THE
BUREAU OF NAVAL PERSONNEL, DEPARTMENT OF THE NAVY. THE AUTHORIZATION
FORM, N.NAV. 395, SHOWS THE FOLLOWING SERVICE WAS CREDITED UPON WILSON'S
TRANSFER:
TABLE
SERVICE FOR TERM ENLISTED
DISCHARGED TRANSFER
YR. MO. DA.
4 2-6-11 12-7-14 4 0 0
4 12-8-14 3-6-16 1 2 28 DOW
4-25-21 3 4 12
4 (**) 4-26-21 4-25-27 6 0 0
4 4-30-27 TO 4-30-29 2 0 1
-------------
16 7 11
(*) ENLISTMENT CHANGED TO D.O.W. AND EXTENDED FOR TWO YEARS EFFECTIVE
24 JULY 1919.
(**) ENLISTMENT EXTENDED FOR TWO YEARS.
WILSON SUBSEQUENTLY SERVED ON ACTIVE DUTY FROM JUNE 17, 1941, THROUGH
APRIL 21, 1945, A PERIOD OF 3 YEARS, 10 MONTHS AND 5 DAYS WHICH, WHEN
ADDED TO THE 16 YEARS, 7 MONTHS AND 11 DAYS (INCLUDING CONSTRUCTIVE
SERVICE) CREDITED TO HIM FOR TRANSFER PURPOSES, TOTALS 20 YEARS, 5
MONTHS AND 16 DAYS. ON THAT BASIS HIS CALLAHAN RATE OF RETIRED PAY IS
LESS THAN THE AMOUNT OF RETIRED PAY PAID TO HIM BY THE DEPARTMENT OF THE
NAVY UNDER METHOD (B), SECTION 511 OF THE CAREER COMPENSATION ACT OF
1949, CH. 681, 63 STAT. 829, DURING THE PERIOD JULY 13, 1957, TO
FEBRUARY 12, 1963, INCLUSIVE. SEE SETTLEMENT OF FEBRUARY 4, 1965.
AS INDICATED IN YOUR LETTER OF MAY 11, 1965, THE DEPARTMENT OF THE
NAVY IN A LETTER DATED MARCH 19, 1953, ADDRESSED TO THE ATTORNEY
GENERAL, DEPARTMENT OF JUSTICE, SUBMITTING A COMPUTATION OF THE AMOUNT
DUE WILSON AS PLAINTIFF NO. 44 IN BAILEY, ET AL. V. UNITED STATES,
CT.CL. NO. 588-52 (STIPULATED JUDGMENT ENTERED ON DECEMBER 1, 1953),
REPORTED THAT WILSON HAD 16 YEARS, 10 MONTHS AND 9 DAYS OF SERVICE,
INCLUDING CONSTRUCTIVE SERVICE, FOR TRANSFER TO THE FLEET NAVAL RESERVE.
THE TOTAL OF 16 YEARS, 10 MONTHS AND 9 DAYS OBVIOUSLY REFLECTS A FULL
TWO-YEAR CREDIT FOR WILSON'S TWO-YEAR EXTENSION OF ENLISTMENT ON JULY
24, 1919. HOWEVER, THE STATEMENT CONTAINED IN THE LETTER OF MARCH 19,
1953, SHOWING 16 YEARS, 10 MONTHS AND 9 DAYS OF SERVICE CREDITABLE FOR
TRANSFER TO THE FLEET NAVAL RESERVE IS INCONSISTENT WITH THE SERVICE
CREDITED TO WILSON ON N.NAV. 395 AT THE TIME OF HIS TRANSFER TO THE
FLEET NAVAL RESERVE ON APRIL 30, 1929.
SECTION 2, ACT OF MAY 23, 1930, CH. 311, 46 STAT. 375, PROVIDED:
"ALL TRANSFERS OF ENLISTED MEN OF THE NAVY OR MARINE CORPS TO THE
FLEET NAVAL RESERVE OR FLEET MARINE CORPS RESERVE CREATED BY THE ACTS OF
AUGUST 29, 1916, AND FEBRUARY 28, 1925, AND ALL TRANSFERS OF MEMBERS OF
THE FLEET NAVAL RESERVE OR FLEET MARINE CORPS RESERVE TO THE RETIRED
LIST HERETOFORE OR HEREAFTER MADE BY THE NAVY DEPARTMENT SHALL BE
CONCLUSIVE FOR ALL PURPOSES, AND ALL MEN SO TRANSFERRED SHALL FROM DATE
OF TRANSFER BE ENTITLED TO PAY AND ALLOWANCES IN ACCORDANCE WITH THEIR
RANKS OR RATING AND LENGTH OF SERVICE AS DETERMINED BY THE NAVY
DEPARTMENT AT TIME OF TRANSFER.'
THE AMOUNT OF SERVICE CREDITED TO WILSON, 16 YEARS, 7 MONTHS AND 11
DAYS UPON HIS TRANSFER TO THE FLEET NAVAL RESERVE IS CONCLUSIVE FOR ALL
PURPOSES. IN THAT CONNECTION THE BUREAU OF NAVAL PERSONNEL, IN LETTER
OF AUGUST 19, 1965, ABOVE REFERRED TO, HAS ADVISED THIS OFFICE THAT "NO
OFFICIAL CHANGE HAS BEEN MADE IN THE TOTAL SERVICE CREDITABLE FOR
TRANSFER SUBSEQUENT TO THE DATES OF THE AUTHORIZATIONS.' IN THE ABSENCE
OF SUCH A CHANGE (SEE 10 U.S.C. 6332) THIS OFFICE MAY RECOGNIZE ONLY
THAT SERVICE WHICH WAS CREDITED TO WILSON ON N.NAV. 395 FOR THE PURPOSE
OF HIS TRANSFER TO THE FLEET NAVAL RESERVE.
ACCORDINGLY, SINCE THE SERVICE SET FORTH IN WILSON'S AUTHORIZATION
FOR TRANSFER, TOGETHER WITH THE SUBSEQUENT PERIOD OF ACTIVE DUTY
PERFORMED BY HIM, TOTALS LESS THAN 20 YEARS AND 6 MONTHS, THERE IS NO
AUTHORITY TO COMPUTE WILSON'S RETIRED PAY UNDER THE CALLAHAN RULE ON THE
BASIS OF 21 YEARS OF SERVICE. THE DISALLOWANCE OF THE CLAIM IN THE
SETTLEMENT OF FEBRUARY 4, 1965, IS SUSTAINED.
B-128309, DEC. 1, 1965
TO KING AND KING:
REFERENCE IS MADE TO YOUR LETTERS OF MAY 11, 1965, AND MAY 26, 1965,
REQUESTING RECONSIDERATION OF THE ACTION TAKEN BY THE CLAIMS DIVISION OF
THIS OFFICE IN SETTLEMENT DATED OCTOBER 21, 1964, DISALLOWING THE CLAIM
OF ALYCE W. GRANTHAM, FOR INCREASED RETIRED PAY IN THE CASE OF TERRELL
R. WOOD, USN, RETIRED, DECEASED, BY REASON OF ADDITIONAL CONSTRUCTIVE
SERVICE BELIEVED CREDITABLE UNDER THE HOLDING IN CALLAHAN V. UNITED
STATES, CT.CL. NO. 349-62, DECIDED FEBRUARY 14, 1964.
IN AGUINALDO, ET AL. V. UNITED STATES, CT.CL. NO. 49726, A JUDGMENT
BASED ON A STIPULATION AGREEMENT WAS ENTERED APRIL 7, 1953, IN FAVOR OF
WOOD (PLAINTIFF NO. 127 IN THAT CASE) ALLOWING HIM INCREASED RETIRED
PAY UNDER THE BASIC RULE OF THE SANDERS CASE, 120 CT.CL. 501 (1951),
PLUS 5 PERCENTUM ON GOOD CONDUCT MARK (BY COMPROMISE) FOR THE PERIOD MAY
20, 1945, TO JUNE 30, 1952, INCLUSIVE. WOOD'S CLAIM AS PLAINTIFF NO.
145 IN ARMSTRONG, ET AL. V. UNITED STATES, CT.CL. NO. 249-56, FOR 10
PERCENTUM INCREASE IN RETIRED PAY BY REASON OF GOOD CONDUCT MARK FOR THE
PERIOD JULY 1, 1952, TO DATE OF JUDGMENT WAS DISMISSED ON ITS MERITS
JULY 12, 1957, 139 CT.CL. 748, THEREBY RAISING THE BAR OF RES JUDICATA
AS TO THE PERIOD COVERED BY THAT JUDGMENT. CONSEQUENTLY, ONLY THE
PERIOD JULY 13, 1957, TO MAY 12, 1960 (DATE OF WOOD'S DEATH) IS NOW OPEN
FOR CONSIDERATION OF THE CLAIM FOR ADDITIONAL RETIRED PAY BENEFITS UNDER
THE CALLAHAN RULE.
A COPY OF N.NAV. 395, TRANSFER TO FLEET NAVAL RESERVE, RECEIVED WITH
LETTER OF AUGUST 19, 1965, FROM THE BUREAU OF NAVAL PERSONNEL,
DEPARTMENT OF THE NAVY, SHOWS THAT WOOD'S TRANSFER TO THE FLEET NAVAL
RESERVE WAS ACCOMPLISHED ON SEPTEMBER 14, 1923, ON THE BASIS OF 17
YEARS, 6 MONTHS AND 21 DAYS OF SERVICE (INCLUDING CONSTRUCTIVE SERVICE)
CREDITABLE FOR TRANSFER AS FOLLOWS:
TABLE
SERVICE CREDITED
ENLISTED DISCHARGED FOR TRANSFER
6/11/06 6/10/10 4-0-0
6/11/10 4/4/14 4-0-0
4/13/14 2/18/18 4-0-0
2/19/18 9/9/21 3-6-21
9/15/21 9/14/23 2-0-0
--------
17-6-21
WOOD SERVED ON ACTIVE DUTY FROM JUNE 20, 1942, TO MAY 19, 1945,
INCLUSIVE, A PERIOD OF 2 YEARS AND 11 MONTHS WHICH, WHEN ADDED TO THE 17
YEARS, 6 MONTHS AND 21 DAYS' SERVICE CREDITED TO HIM FOR TRANSFER
PURPOSES, TOTALS 20 YEARS, 5 MONTHS AND 21 DAYS. ON THAT BASIS HIS
CALLAHAN RATE OF RETIRED PAY IS LESS THAN THE AMOUNT OF RETIRED PAY PAID
TO HIM BY THE DEPARTMENT OF THE NAVY UNDER METHOD (B), SECTION 511 OF
THE CAREER COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 829, DURING THE
PERIOD JULY 13, 1957, TO MAY 12, 1960, INCLUSIVE. SEE SETTLEMENT OF
OCTOBER 21, 1964.
A STATEMENT OF WOOD'S NAVAL SERVICE SET FORTH IN BUREAU OF NAVAL
PERSONNEL LETTER OF JUNE 19, 1964, ADDRESSED TO THE CLAIMS DIVISION OF
THIS OFFICE DISCLOSES THAT HIS ENLISTMENT OF FEBRUARY 19, 1918, WAS A
"DURATION OF WAR" ENLISTMENT WHICH WOOD, ON DECEMBER 3, 1919, EXTENDED
FOR TWO YEARS. AS INDICATED IN YOUR LETTER OF MAY 11, 1965, THE
DEPARTMENT OF THE NAVY, IN A LETTER DATED SEPTEMBER 30, 1952, ADDRESSED
TO THE ATTORNEY GENERAL, DEPARTMENT OF JUSTICE, SUBMITTING A COMPUTATION
OF THE AMOUNT DUE WOOD AS PLAINTIFF NO. 127 IN AGUINALDO, ET AL. V.
UNITED STATES, CT.CL. NO. 49726 (STIPULATION JUDGMENT ENTERED APRIL 7,
1953), REPORTED THAT WOOD HAD 17 YEARS, 9 MONTHS AND 14 DAYS' SERVICE,
INCLUDING CONSTRUCTIVE SERVICE, FOR TRANSFER TO THE FLEET NAVAL RESERVE.
HOWEVER, THAT STATEMENT OF SERVICE CREDITABLE FOR TRANSFER IS
INCONSISTENT WITH THE AMOUNT OF SERVICE CREDITED TO WOOD ON N.NAV. 395
AT THE TIME OF HIS TRANSFER TO THE FLEET NAVAL RESERVE ON SEPTEMBER 14,
1923.
SECTION 2, ACT OF MAY 23, 1930, CH. 311, 46 STAT. 375, PROVIDED:
"ALL TRANSFERS OF ENLISTED MEN OF THE NAVY OR MARINE CORPS TO THE
FLEET NAVAL RESERVE OR FLEET MARINE CORPS RESERVE CREATED BY THE ACTS OF
AUGUST 29, 1916, AND FEBRUARY 28, 1925, AND ALL TRANSFERS OF MEMBERS OF
THE FLEET NAVAL RESERVE OR FLEET MARINE CORPS RESERVE TO THE RETIRED
LIST HERETOFORE OR HEREAFTER MADE BY THE NAVY DEPARTMENT SHALL BE
CONCLUSIVE FOR ALL PURPOSES, AND ALL MEN SO TRANSFERRED SHALL FROM DATE
OF TRANSFER BE ENTITLED TO PAY AND ALLOWANCES IN ACCORDANCE WITH THEIR
RANKS OR RATING AND LENGTH OF SERVICE AS DETERMINED BY THE NAVY
DEPARTMENT AT TIME OF TRANSFER.'
THE AMOUNT OF SERVICE THAT WAS CREDITED TO WOOD, 17 YEARS, 6 MONTHS
AND 21 DAYS, UPON HIS TRANSFER TO THE FLEET NAVAL RESERVE, IS CONCLUSIVE
FOR ALL PURPOSES. IN THAT CONNECTION THE BUREAU OF NAVAL PERSONNEL, IN
LETTER OF AUGUST 19, 1965, ABOVE REFERRED TO, HAS ADVISED THIS OFFICE
THAT "NO OFFICIAL CHANGE HAS BEEN MADE IN THE TOTAL SERVICE CREDITABLE
FOR TRANSFER SUBSEQUENT TO THE DATES OF THE AUTHORIZATIONS.' IN THE
ABSENCE OF SUCH A CHANGE (SEE 10 U.S.C. 6332) THIS OFFICE MAY RECOGNIZE
ONLY THAT SERVICE WHICH WAS CREDITED TO WOOD ON N.NAV. 395 AT THE TIME
OF HIS TRANSFER TO THE FLEET NAVAL RESERVE.
ACCORDINGLY, SINCE THE SERVICE SET FORTH IN WOOD'S AUTHORIZATION FOR
TRANSFER, TOGETHER WITH THE SUBSEQUENT PERIOD OF ACTIVE DUTY PERFORMED
BY HIM, TOTALS LESS THAN 20 YEARS AND 6 MONTHS, THERE IS NO AUTHORITY TO
COMPUTE WOOD'S RETIRED PAY UNDER THE CALLAHAN RULE ON THE BASIS OF 21
YEARS OF SERVICE. THE DISALLOWANCE OF THE CLAIM IN THE SETTLEMENT OF
OCTOBER 21, 1964, IS SUSTAINED.
B-157014, DEC. 1, 1965
TO BATTLE, FOWLER, STOKES AND KHEEL:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 10, 1965, PROTESTING
ON BEHALF OF DECISION SYSTEMS, INCORPORATED, TEANECK, NEW JERSEY, THE
REJECTION OF ITS PROPOSAL AND THE AWARD OF A CONTRACT TO THE
INTERNATIONAL BUSINESS MACHINES CORPORATION UNDER REQUEST FOR PROPOSAL
NO. WA4R-5-278, ISSUED ON DECEMBER 31, 1964, BY THE FEDERAL AVIATION
AGENCY FOR THE PROCUREMENT OF COMPUTER PROGRAMMING SERVICES.
IT IS STATED IN YOUR LETTER THAT THE FEDERAL AVIATION AGENCY'S
SPECIFICATIONS CLEARLY SET FORTH THE SYSTEM THAT THE AGENCY WANTED
DELIVERED; THAT NO RESEARCH AND DEVELOPMENT WAS INVOLVED; AND THAT YOU
ARE RELIABLY INFORMED THAT DECISION SYSTEMS, INCORPORATED, WAS THE
LOWEST BIDDER BY A SUBSTANTIAL MARGIN. YOU INDICATED THAT A DECISION
HAD BEEN MADE TO AWARD A CONTRACT TO THE INTERNATIONAL BUSINESS MACHINES
CORPORATION AND SUGGESTED THAT SUCH DECISION MAY HAVE RESULTED SOLELY
FROM A BELIEF ON THE PART OF THE COGNIZANT ADMINISTRATIVE OFFICIALS THAT
A LARGE COMPANY COULD PERFORM THE REQUIRED SERVICES BETTER THAN A SMALL
COMPANY.
THE RECORD SUBMITTED BY THE FEDERAL AVIATION AGENCY SHOWS THAT
REQUEST FOR PROPOSAL NO. WA4R-5-278 WAS ISSUED TO 68 FIRMS ON DECEMBER
31, 1964, WITH A CLOSING DATE OF FEBRUARY 12, 1965. SOME OF THE
AGENCY'S REQUIREMENTS HAD BEEN ANNOUNCED PREVIOUSLY TO INDUSTRY AT A
PRE-BID CONFERENCE ON SEPTEMBER 14, 1964, WHEN PRELIMINARY
SPECIFICATIONS WERE DISTRIBUTED. THE WORK STATEMENT IN THE SCHEDULE
ATTACHED TO THE REQUEST FOR PROPOSAL PROVIDED FOR THE DESIGN,
PRODUCTION, DOCUMENTATION, INSTALLATION AND SUPPORT FOR SUBSEQUENT
MODIFICATION OF THE NATIONAL AIRSPACE SYSTEM, ENROUTE STAGE A COMPUTER
PROGRAM SUBSYSTEM FOR THE IBM COMPUTER IN ACCORDANCE WITH FEDERAL
AVIATION AGENCY ENGINEERING REQUIREMENT, FAA-ER-120-001, DATED OCTOBER
9, 1964, ENTITLED "COMPUTER PROGRAM FOR ENROUTE STAGE A MODEL I OF
NATIONAL AIRSPACE SYSTEM," AMENDMENT NO. 1 THERETO DATED DECEMBER 23,
1964, AND ANY APPLICABLE SPECIFICATIONS OR DOCUMENTS REFERENCED THEREIN.
PROSPECTIVE OFFERORS WERE ADVISED IN THE REQUEST FOR PROPOSAL THAT
THE GOVERNMENT PROPOSED TO ENTER INTO A COST-PLUS-A-FIXED-FEE CONTRACT
FOR THE PARTICULAR WORK, AND THAT PROPOSALS WOULD BE CONSIDERED ONLY
FROM RESPONSIBLE OFFERORS WITH SUFFICIENT FINANCIAL RESOURCES, PLANT
SUPPORT AND ORGANIZATION, AND WITH SUFFICIENT EXPERIENCE IN THE TYPE OF
WORK CONTEMPLATED IN THE SCHEDULE OF THE REQUEST FOR PROPOSAL.
THE PROCUREMENT IN QUESTION INVOLVED A REQUIREMENT FOR 15 MONTHS OF
COMPUTER PROGRAMMING EFFORT FOR THE NATIONAL AIRSPACE SYSTEM, ENROUTE
STAGE A. THE PROGRAMMING WILL BE FOR SYSTEMS LOCATED AT THE NATIONAL
AVIATION FACILITIES EXPERIMENTAL CENTER, ATLANTIC CITY, NEW JERSEY, AND
AT THE JACKSONVILLE, FLORIDA, AIR ROUTE TRAFFIC CONTROL CENTER. THE
NAFEC SYSTEM IS FOR TEST AND EVALUATION PURPOSES. THE JACKSONVILLE
SYSTEM WILL BE THE FIRST OF SUCH SYSTEMS TO BE INSTALLED ON A NATIONWIDE
BASIS TO PROVIDE SEMI-AUTOMATIC CONTROL OF AIR TRAFFIC. THE COMPUTER
PROGRAMMING NECESSARY FOR OPERATION OF THESE SYSTEMS IS BEING PROCURED
CONCURRENTLY WITH THE ACQUISITION OF MUCH OF THE SYSTEM "HARDWARE.'
THE SPECIFICATIONS PROVIDED BY THE GOVERNMENT IN THIS CASE DID NOT
PURPORT TO BE FINAL SPECIFICATIONS FOR THE PROGRAMMING WORK. RATHER, IT
WAS CONTEMPLATED THAT THE CONTRACT WOULD BE AWARDED PRIMARILY ON THE
BASIS OF THAT PROPOSAL WHICH WAS CONSIDERED TO REPRESENT THE BEST
TECHNICAL APPROACH TO THE PROGRAMMING OF A COMPUTER SYSTEM WHICH WOULD
MEET THE AGENCY'S STANDARDS AND GENERAL REQUIREMENTS. A
COST-PLUS-A-FIXED-FEE CONTRACT WAS PROPOSED AND IT IS APPARENT THAT
PROSPECTIVE OFFERORS WERE ON NOTICE OF THE FACT THAT THE SELECTION OF
THE FIRM FOR NEGOTIATION OF THE CONTRACT WOULD NOT BE DEPENDENT ENTIRELY
UPON A COMPARISON OF ESTIMATED COSTS AND FEES AS SET FORTH IN THE
VARIOUS PROPOSALS.
IT HAS BEEN REPORTED BY THE FEDERAL AVIATION AGENCY THAT A PRECISE
SPECIFICATION FOR FIXED-PRICE CONTRACTING COULD NOT HAVE BEEN WRITTEN
FOR THE PROGRAMMING OF A NEW SYSTEM OF THE COMPLEXITY OF THAT
CONTEMPLATED IN THE REQUEST FOR PROPOSAL AND, THEREFORE, ONLY THE
GENERAL REQUIREMENTS OF THE GOVERNMENT WERE FURNISHED TO COMPANIES IN
THE PROPOSAL REQUEST. ALTHOUGH THE PROPOSED CONTRACT WAS NOT DESIGNATED
AS ONE FOR RESEARCH AND DEVELOPMENT, IT CALLED FOR PROFESSIONAL SERVICES
OF A MORE OR LESS INTRICATE AND COMPLEX NATURE, AND THE ENTIRE TENOR OF
THE REQUEST FOR PROPOSAL INDICATED THAT A CAREFUL EVALUATION OF EACH
OFFEROR'S COMPETENCE WOULD BE MADE.
DECISION SYSTEMS, INCORPORATED, SUBMITTED A PROPOSAL UNDER WHICH IT
AGREED TO PERFORM THE REQUIRED DESIGNING AND OTHER WORK ON A
COST-PLUS-A-FIXED-FEE BASIS AND, ALTERNATIVELY, AT A FIXED PRICE OF
$658,175, WHICH WOULD COVER THE COST OF CERTAIN ADDITIONAL
NON-OPERATIONAL FUNCTIONS BUT NOT THE COST OF OBTAINING NECESSARY
PRIVATELY-OWNED FACILITIES. IN CONNECTION WITH THE
COST-PLUS-A-FIXED-FEE OFFER, THE COMPANY ESTIMATED THAT THE TOTAL COST
TO THE GOVERNMENT FOR THE PROJECT WOULD AMOUNT TO THE SUM OF
$572,326.09, EXCLUDING THE COST OF OBTAINING PRIVATELY-OWNED FACILITIES
BUT INCLUDING $46,415.32 AS THE ESTIMATED COST AND FEE FOR THE SO-CALLED
ADDITIONAL NON-OPERATIONAL FUNCTIONS. THE FEDERAL AVIATION AGENCY
DEDUCTED THE SUM OF $46,415.32 AND CONSIDERED THE BASIC
COST-PLUS-A-FIXED-FEE ESTIMATE TO BE $525,911, REPRESENTING ESTIMATED
COSTS OF $491,506, PLUS A FIXED FEE OF 7 PERCENT, OR $34,405. FOUR
OTHER PROPOSALS WERE RECEIVED IN REPORTED AMOUNTS WHICH EXCEEDED $1
MILLION IN EACH CASE, AND IN ITS PROPOSAL THE INTERNATIONAL BUSINESS
MACHINES CORPORATION ESTIMATED THAT THE COST OF THE PROJECT WOULD AMOUNT
TO THE SUM OF $1,854,681.
IT IS REPORTED THAT A TECHNICAL EVALUATION TEAM INITIALLY REVIEWED
ALL OF THE FIVE PROPOSALS FROM THE STANDPOINT ONLY OF DETERMINING
WHETHER THE PROPOSALS MET THE AGENCY'S STANDARDS AND REQUIREMENTS AND
OTHERWISE INDICATED THAT THE OFFERORS WERE FULLY CAPABLE OF PERFORMING
THE PROPOSED COMPUTER PROGRAMMING WORK. AS THE RESULT OF THE INITIAL
REVIEW, THE PROPOSALS OF DECISION SYSTEMS, INCORPORATED, AND ANOTHER
CONCERN WERE ELIMINATED FROM FURTHER CONSIDERATION. A MORE DETAILED
ASSESSMENT WAS THEN MADE OF THE REMAINING THREE PROPOSALS, WITH PROPOSED
PRICES OR ESTIMATES OF COST ALSO BEING CONSIDERED. ON THE BASIS OF THIS
FURTHER REVIEW, THE EVALUATION TEAM CONCLUDED THAT THE INTERNATIONAL
BUSINESS MACHINES CORPORATION HAD SUBMITTED THE MOST FAVORABLE PROPOSAL
FROM BOTH TECHNICAL AND COST STANDPOINTS. A CONTRACT IN AN ESTIMATED
AMOUNT OF $1,761,470 WAS SUBSEQUENTLY NEGOTIATED WITH AND AWARDED TO THE
INTERNATIONAL BUSINESS MACHINES CORPORATION.
IN THE CASE OF THE PROPOSAL SUBMITTED BY DECISION SYSTEMS,
INCORPORATED, IT WAS ADMINISTRATIVELY DETERMINED ON THE BASIS OF THE
PROPOSAL ITSELF AND OTHER KNOWN BACKGROUND INFORMATION THAT THE COMPANY
FAILED TO SHOW FULL CAPABILITY TO PERFORM THE REQUIRED COMPUTER
PROGRAMMING WORK. IT WAS ALSO DETERMINED THAT THE PROPOSAL WAS
TECHNICALLY NONRESPONSIVE IN SEVERAL AREAS. THE TECHNICAL EVALUATION
TEAM REPORTED VARIOUS MAJOR DEFICIENCIES IN THE PROPOSAL, SOME OF WHICH
ARE OUTLINED IN THE REPORT OF THE FEDERAL AVIATION AGENCY TO OUR OFFICE.
THE REPORT OF THE FEDERAL AVIATION AGENCY SETS FORTH, AS AN EXAMPLE
OF THE OFFEROR'S APPARENT FAILURE TO SHOW FULL CAPABILITY AND
UNDERSTANDING OF THE COMPLEXITY OF THE PROPOSED WORK, THE FACT THAT THE
PROPOSAL GREATLY UNDERESTIMATED THE MANPOWER REQUIREMENTS FOR THE
PROCUREMENT. THE AGENCY'S ESTIMATE FOR SUCH REQUIREMENTS WAS 845
MAN-MONTHS AS COMPARED WITH THE OFFEROR'S ESTIMATE OF 250 MAN-MONTHS OF
PROGRAMMING EFFORT. THE LATTER FIGURE IS REPORTED TO BE 437 MAN-MONTHS
LOWER THAN THE ESTIMATE OF ANY OTHER OFFEROR AND THE FEDERAL AVIATION
AGENCY CONSIDERED THE ESTIMATE OF 250 MAN-MONTHS TO BE UNREALISTIC. IN
ADDITION, IT IS REPORTED THAT THE OFFEROR PROPOSED THAT A MAXIMUM OF 25
PERSONNEL WOULD BE ASSIGNED TO THE CONTRACT, WHEREAS THE GOVERNMENT'S
ESTIMATE WAS FROM 50 TO 60 PERSONS.
IT IS STATED IN THE AGENCY'S REPORT THAT THE OFFEROR ATTEMPTED TO
JUSTIFY SUCH EXTREMELY LOW ESTIMATES OF MANPOWER REQUIREMENTS AS SET
FORTH IN ITS PROPOSAL BY PROPOSING A LEVEL OF PRODUCTIVITY WHICH WAS
UNREALISTICALLY HIGH AS COMPARED WITH BOTH THE INDUSTRY AS A WHOLE AND
PRIOR EXPERIENCE OF DECISION SYSTEMS, INCORPORATED, ON FEDERAL AVIATION
AGENCY CONTRACTS.
WITH RESPECT TO THE DETERMINATION THAT THE PROPOSAL OF DECISION
SYSTEMS, INCORPORATED, WAS NONRESPONSIVE IN SEVERAL AREAS, THE AGENCY'S
REPORT STATES:
"* * * FIRST, ITS PROPOSED OPERATIONAL PROGRAM FOR PROCESSING RADAR
DATA RECEIVED AT THE INPUT BUFFER AREAS WAS TOTALLY INADEQUATE. IF DSI
HAD ATTEMPTED TO PROCESS RADAR DATA AS PROPOSED, THE RESULT WOULD HAVE
BEEN SEVERE LOSS AND DISTORTION OF DATA, WITH A CONSEQUENT ADVERSE
EFFECT ON THE AIR TRAFFIC CONTROL SYSTEM. SECOND, DSI'S PROPOSAL FAILED
TO INDICATE ADEQUATE COMPREHENSION OF THE SYSTEM MONITORING AND CONTROL
PROGRAM, WHICH IS THE MASTER CONTROL PROGRAM FOR THE SYSTEM. THE
PURPOSE OF THIS PROGRAM IS TO SCHEDULE THE USE OF OTHER OPERATIONAL
PROGRAMS AND MAKE ERROR CORRECTIONS ON A CONSTANT BASIS. THIRD, DSI
PROPOSED TO FURNISH SEVERAL UTILITY PROGRAM COMPONENTS AS PORTIONS OF A
COMPILER PROGRAM, WHICH PROGRAM IS NOT YET COMPLETE AND IS PROGRAMMED
FOR THE IBM 7090 COMPUTER SYSTEM. CERTAIN OF THESE UTILITY PROGRAM
COMPONENTS ARE REQUIRED BY PARAGRAPH 3.3.2 OF FAA-ER-120-001 OF OCTOBER
9, 1964, WHICH WAS A PART OF THE RFP, TO INTERFACE AND BE INTEGRATED
WITH OTHER UTILITY AND SUPPORT SOFTWARE ITEMS WHICH ARE PROGRAMMED FOR
THE IBM 9020 COMPUTER BEING PROVIDED BY THE HARDWARE CONTRACTOR.
OFFERING A COMPILER PROGRAM FOR A 7090 COMPUTER, AND NOT SEPARATE
UTILITY PROGRAMS COMPATIBLE WITH THE 9020 COMPUTER SYSTEM, IS BASICALLY
NON-RESPONSIVE TO THE REQUEST FOR PROPOSALS.'
IT HAS BEEN CONSISTENTLY OUR POSITION THAT THE RESPONSIBILITY FOR
TECHNICAL EVALUATIONS OF BIDS AND PROPOSALS, AND FOR DETERMINATIONS AS
TO WHETHER BIDDERS OR OFFERORS ARE RESPONSIVE AND FULLY CAPABLE OF
PERFORMING PROPOSED GOVERNMENT CONTRACTS, RESTS WITH THE CONTRACTING
AGENCIES OF THE GOVERNMENT, AND THAT THEIR DECISIONS IN SUCH MATTERS
MUST GOVERN IN THE ABSENCE OF A CLEAR SHOWING OF IMPROPRIETY OR ERROR.
THE COURTS HAVE ADOPTED A SIMILAR VIEW. O-BRIEN V. CARNEY, 6 F.SUPP.
761; FRIEND V. LEE, 221 F.2D 96.
IT APPEARS THAT THE FEDERAL AVIATION AGENCY HAS FURNISHED A
SUFFICIENT JUSTIFICATION FOR HAVING CONSIDERED THAT THE PROPOSAL
SUBMITTED BY DECISION SYSTEMS, INCORPORATED, WAS NOT ENTITLED TO FURTHER
CONSIDERATION AFTER COMPLETION OF THE INITIAL TECHNICAL REVIEW OF FIVE
PROPOSALS RECEIVED IN RESPONSE TO REQUEST FOR PROPOSAL NO. WA4R-5-278.
WE FIND NO BASIS FOR A CONCLUSION THAT THE FEDERAL AVIATION AGENCY
DECIDED TO NEGOTIATE THE CONTRACT WITH THE INTERNATIONAL BUSINESS
MACHINES
CORPORATION BECAUSE OF A BELIEF THAT A LARGE COMPANY COULD PERFORM
THE PROPOSED COMPUTER PROGRAMMING WORK BETTER THAN A SMALL COMPANY.
ACCORDINGLY, THE PROTEST MADE TO OUR OFFICE IN THE MATTER MUST BE,
AND IS, HEREBY DENIED.
B-156689, NOV. 30, 1965
TO MR. VITO MICHAEL MECCA:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1965, IN WHICH YOU
AGAIN REQUEST RECONSIDERATION OF THE DENIAL OF YOUR CLAIM FOR $156.28,
REPRESENTING PAY AND ALLOWANCES FOR 47 DAYS OF UNUSED ACCRUED LEAVE
WHILE YOU WERE SERVING IN THE ARMY. ALSO, YOU SAY THAT YOUR SISTER,
MRS. ANNA CHARLO, RECEIVED $700 OF THE AMOUNT DUE YOU AS ARMY PAY FOR
THE PERIOD OCTOBER 2, 1946, TO APRIL 22, 1948, AND THAT, THEREFORE, WE
ARE IN ERROR IN STATING THAT NO FAMILY ALLOWANCE DEDUCTIONS WERE MADE
FROM YOUR ARMY PAY FOR THAT PERIOD.
WE HAVE ADVISED YOU SEVERAL TIMES THAT NO PAYMENT TO YOU IS
AUTHORIZED BECAUSE OF THE FACT THAT YOUR INDEBTEDNESS TO THE UNITED
STATES IN THE AMOUNT OF $176.33 (MADE UP ON THE FIVE ITEMS OF $9.75,
$3.70, $12,88, $100, AND $50) EXCEEDS BY $20.05 THE SUM OF $156.28 SHOWN
AS DUE FROM THE GOVERNMENT TO YOU. FURTHERMORE, WE HAVE CAREFULLY
EXPLAINED TO YOU WHAT IS REPRESENTED BY EACH OF THE FIVE ITEMS OF
INDEBTEDNESS. IT NOW APPEARS TO BE YOUR CONTENTION THAT YOU SHOULD BE
PAID THE AMOUNT OF $156.28 IF THE GOVERNMENT CANNOT AT THIS TIME
PRODUCE, FOR EACH ITEM OF THE INDEBTEDNESS, A PAID CHECK BEARING YOUR
SIGNATURE.
WITH OUR LETTER OF SEPTEMBER 14, 1965, B-156689, WE FURNISHED YOU A
PHOTOCOPY OF VOUCHER NO. 104108, JUNE 1946 ACCOUNTS OF J. HARRIS, AND
WE EXPLAINED THE INDEBTEDNESS ITEM OF $9.75 WAS BASED ON THE INFORMATION
SHOWN ON THAT VOUCHER. WE ALSO FURNISHED YOU WITH THAT LETTER A
PHOTOCOPY OF VOUCHER NO. 9827, APRIL 1948 ACCOUNTS OF J. MANO, AND WE
EXPLAINED THAT THE INDEBTEDNESS ITEM OF $3.70 WAS BASED ON THE
INFORMATION SHOWN ON THAT VOUCHER. YOUR SIGNATURE APPEARS ON THE TWO
VOUCHERS MENTIONED AND THERE IS NO INDICATION THAT, WHEN YOU SIGNED SUCH
VOUCHERS, YOU QUESTIONED THE CORRECTNESS OF THE TWO ITEMS OF
INDEBTEDNESS. SUCH ITEMS REPRESENT BALANCES DUE THE GOVERNMENT RATHER
THAN ACTUAL PAYMENT TO YOU, THE AMOUNTS PROPERLY CHARGED AGAINST YOUR
ACCOUNT BEING IN EXCESS OF THE PAY WHICH ACCRUED TO YOU DURING THE
PERIODS INVOLVED. ALSO, IN THE LETTER OF SEPTEMBER 14, 1965, WE
FURNISHED YOU AN EXPLANATION REGARDING THE INDEBTEDNESS ITEM OF $50,
REPRESENTING THE UNCOLLECTED BALANCE OF THE FORFEITURE UNDER THE SUMMARY
COURT-MARTIAL SENTENCE OF JUNE 4, 1947.
THE SIXTH PARAGRAPH OF OUR LETTER OF SEPTEMBER 14, 1965, READS AS
FOLLOWS:
"THE VETERANS ADMINISTRATION, ON DECEMBER 23, 1952, REPORTED TO OUR
OFFICE YOUR INDEBTEDNESS OF $12.88, COVERING AN ERRONEOUS PAYMENT OF
COMPENSATION TO YOU FOR THE PERIOD OCTOBER 1 TO 31, 1946,
AFTER YOU HAD REENLISTED IN THE ARMY. THAT AGENCY, ON THE SAME DATE,
REPORTED YOUR INDEBTEDNESS OF $100, RESULTING FROM CONCURRENT PAYMENTS
OF SUBSISTENCE ALLOWANCE AND READJUSTMENT ALLOWANCE FOR THE WEEKS ENDING
"10.3.48 - 10.31.48.' IT WAS INDICATED IN THE REPORTS THAT YOU HAD BEEN
NOTIFIED OF THE ERRONEOUS PAYMENTS BUT THAT NO REFUND HAD BEEN MADE BY
YOU. PHOTOCOPIES OF THE TWO REPORTS ARE ENCLOSED.'
THE RECORDS INDICATE THAT CHECK NO. 13,828,431, WHICH RELATED TO THE
COMPENSATION OVERPAYMENT OF $12.88, WAS NEGOTIATED IN DUE COURSE AND
PAID BY THE TREASURER OF THE UNITED STATES AND THAT IT WAS SUBSEQUENTLY
DESTROYED BECAUSE OF ITS AGE. THE FURNISHING OF A PHOTOCOPY OF THE
CHECK AT THIS TIME, THEREFORE, IS IMPOSSIBLE. IT MAY BE STATED THAT,
UNDER THE EXPRESS AUTHORITY GRANTED BY THE CONGRESS, ALL SUCH PAID
CHECKS ARE SCHEDULED FOR DESTRUCTION WHEN A PERIOD OF MORE THAN 7 YEARS
HAS ELAPSED SINCE THE DATES THE CHECKS WERE ISSUED. NO CHECK CITATION
IS AVAILABLE IN CONNECTION WITH THE INDEBTEDNESS ITEM OF $100. THE
VETERANS ADMINISTRATION RECORDS SHOW, HOWEVER, THAT YOU HAD BEEN FULLY
INFORMED AS TO SUCH INDEBTEDNESS WHEN YOU WERE INTERVIEWED ON DECEMBER
21, 1950, AND THAT YOU DID NOT THEN QUESTION THE CORRECTNESS THEREOF.
IT WAS CORRECTLY STATED IN OUR LETTER OF SEPTEMBER 14, 1965, THAT NO
FAMILY ALLOWANCE DEDUCTIONS (DESIGNATED AS CLASS F) WERE MADE FROM YOUR
ARMY PAY FOR THE PERIOD OCTOBER 2, 1946, TO APRIL 22, 1948. THE RECORDS
SHOW, HOWEVER, THAT YOU HAD IN EFFECT A VOLUNTARY ALLOTMENT (DESIGNATED
AS CLASS E) OF $75 PER MONTH IN FAVOR OF MRS. ANNA CHARLO, EFFECTIVE
MARCH 1, 1947, AND THAT IT WAS PAID THROUGH DECEMBER 31, 1947, DATE OF
DISCONTINUANCE. PROPER DEDUCTIONS WERE MADE FROM YOUR PAY FOR THAT
PERIOD TO COVER SUCH ALLOTMENT.
WE FIND NOTHING IN YOUR LETTER OF OCTOBER 1, 1965, UPON WHICH TO BASE
A CONCLUSION THAT YOU ARE NOT PROPERLY CHARGEABLE WITH THE FIVE ITEMS OF
INDEBTEDNESS TOTALING $176.33, AND YOU ARE ADVISED, THEREFORE, THAT OUR
PRIOR ACTION ON YOUR CLAIM IS SUSTAINED.
B-156875, NOV. 30, 1965
TO ABC FOOD SERVICE, INC. :
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MAY 26 AND TELEGRAM
AND CONFIRMING LETTER DATED JUNE 8, 1965, PROTESTING AWARD OF A CONTRACT
TO THE IRA GELBER COMPANY UNDER DEPARTMENT OF THE AIR FROCE INVITATION
FOR BIDS NO. 09-603-65-121.
THE INVITATION WAS ISSUED APRIL 22, 1965, SOLICITING 35 FIRMS TO
PARTICIPATE IN COMPETITION FOR A FOOD SERVICES CONTRACT AT ROBINS AIR
FORCE BASE, GEORGIA, WITH AN OPENING DATE OF MAY 24, 1965. THE
INVITATION PROVIDED FOR THE PREPARATION AND SERVING OF AN ESTIMATED
833,000 MEALS TO MILITARY PERSONNEL STATIONED AT THIS BASE. TWELVE BIDS
WERE RECEIVED WITH THE LOW BID OF $0.288 PER MEAL, AT AN ESTIMATED TOTAL
ANNUAL COST OF $239,904, HAVING BEEN SUBMITTED BY THE IRA GELBER
COMPANY. NEXT LOWEST BID WAS THAT OF YOUR COMPANY AT $0.33 PER MEAL OR
AT AN ESTIMATED ANNUAL COST OF $274,890. OTHER BIDS RANGED FROM $0.34
PER MEAL FOR AN ANNUAL COST OF $283,220 TO $0.655 PER MEAL AND ANNUAL
COST OF $545,615.
A FACILITIES CAPABILITY SURVEY WAS INITIATED ON MAY 25, 1965, IN
RESPECT TO GELBER AND ON JUNE 7, 1965, REPLY WAS RECEIVED THAT THE
FACILITIES CAPABILITY REPORT (FCR) ON THE LOW BIDDER HAD RESULTED IN AN
AFFIRMATIVE FINDING IN ALL AREAS. ADDITIONALLY, ON JUNE 11, 1965, A
RECAPITULATION OF THE LOW BIDDER'S PRICING FIGURES WAS FURNISHED TO THE
PROCUREMENT PRICING STAFF.
RESULTS OF THIS ANALYSIS WERE FAVORABLE, SHOWING A MARGIN OF PROFIT
POSSIBLE TO THE CONTRACTOR.
IN YOUR LETTER OF JUNE 8, 1965, YOU STATED THAT A CONTRIBUTING FACTOR
IN THE LOW BID OF THE IRA GELBER COMPANY IS A LACK OF OVERHEAD DUE TO AN
ILLEGAL AND UNETHICAL BUSINESS PRACTICE OF USING THE GOVERNMENT HOT LINE
FOR BUSINESS AND PERSONAL CALLS. YOU ALSO REQUESTED THAT THE
APPROPRIATE GOVERNMENT AGENCY CHECK INTO THE MANNER IN WHICH THE MEAL
COUNT USED FOR PAYMENT TO THE IRA GELBER
COMPANY AT REDSTONE ARSENAL, ALABAMA, IS ASCERTAINED, SINCE IT
APPEARED THAT THE GELBER MANAGEMENT IN CONJUNCTION WITH THE MESS
SERGEANTS WERE PADDING THE HEADCOUNT EACH DAY TO INCLUDE A LARGE NUMBER
OF MEALS NOT SERVED, RESULTING IN THE GELEBER COMPANY BEING PAID MONIES
FOR SERVICES NOT RENDERED. YOU STATE THAT ONCE AGAIN USING THESE
ILLEGAL AND UNETHICAL BUSINESS PRACTICES THIS COMPANY IS ABLE TO BID
LOWER THAN ITS COMPETITORS WHO OPERATE WITH INTEGRITY AND THAT TO
OPERATE WITH THIS LOW BID AT WARNER ROBINS AIR MATERIEL AREA (WRAMA),
THIS COMPANY MUST PLAN ON USING THESE QUESTIONABLE PRACTICES.
THE DEPARTMENT OF THE AIR FORCE INVESTIGATION REGARDING YOUR
ALLEGATION THAT IMPROPER USE OF GOVERNMENT TELEPHONES BY IRA GELBER
COMPANY EMPLOYEES MADE POSSIBLE THAT COMPANY'S LOW BID ON THIS
INVITATION HAS REVEALED THAT GELBER COMPANY EMPLOYEES HAVE USED THE
AUTOVON FACILITIES AT JAMES CONNALLY AIR FORCE BASE, TEXAS, DURING THE
TERM OF THE GELBER CONTRACT THERE. HOWEVER, DUE TO THE CONFLICTING
STATEMENTS RECEIVED FROM THE TELEPHONE OPERATORS INTERVIEWED, TOGETHER
WITH THE FACT THAT NO RECORDS ARE KEPT ON THE CALLS MADE, THE FREQUENCY
AND VALUE OF SUCH USAGE CANNOT BE ASCERTAINED. THIS UNAUTHORIZED USE OF
THE AUTOVON HAS BEEN BROUGHT TO THE ATTENTION OF THE GELBER COMPANY.
WRAMA HAS BEEN INSTRUCTED TO CLOSELY MONITOR THE AUTOVON SYSTEM TO
INSURE THAT NO CONTRACTOR EMPLOYEES OR OTHER UNAUTHORIZED PERSONNEL USE
THE SYTEM. THE SAME INSTRUCTION HAS BEEN
ISSUED TO CONNALLY AIR FORCE BASE. YOUR INFORMATION LEADING TO THE
IMPROVEMENT OF THIS SITUATION IS APPRECIATED.
REGARDING PRACTICES IN THE ADMINISTRATION OF AN ARMY CONTRACT AT
REDSTONE ARSENAL, THAT CONTRACT PROVIDED FOR MESS ATTENDANT SERVICES FOR
ENLISTED PERSONNEL MESSES ON A REQUIREMENTS BASIS. THE CONTRACTOR, IRA
GELBER, WAS PAID FIXED AMOUNTS FOR EACH MEAL SERVED IN THE MESS HALLS
COVERED BY THE CONTRACT.
THE NUMBER OF MEALS FOR WHICH PAYMENTS WERE MADE WAS DETERMINED BY
ACTUAL PHYSICAL COUNT OF THE NUMBER OF PERSONNEL WHO WERE SERVED A MEAL.
INDEPENDENT COUNTS WERE MADE BY CONTRACTOR PERSONNEL AND BY ARMY
PERSONNEL DURING THE ACTUAL SERVING OF EACH MEAL. IMMEDIATELY AFTER THE
COUNTS WERE MADE, CONTRACTOR AND ARMY COUNTS WERE RECONCILED, EVEN IF
RECOUNTING WAS NECESSARY.
UPON RECEIPT OF YOUR INQUIRY, ADMINISTRATIVE EXAMINATION AND AUDIT OF
THE NUMBER OF MEALS FOR WHICH PAYMENTS TO THE CONTRACTOR HAD BEEN
AUTHORIZED WERE MADE. MESS RECORDS, PRESENT-FOR-DUTY RECORDS,
AUTHORIZED-TO-EAT RECORDS, CASH-MEALS-SERVED RECORDS AND MEALS-DRAWN
RECORDS WERE INCLUDED IN THE EXAMINATION. CAREFUL EVALUATION OF THE
INFORMATION DEVELOPED LEADS TO THE CONCLUSION AND TO THE POSITIVE
DETERMINATION THAT YOUR ALLEGATIONS IN THIS AREA OF YOUR PROTEST ARE
COMPLETELY WITHOUT FOUNDATION. FURTHER, THE ALLEGATIONS OF IMPROPER USE
OF GOVERNMENT TELEPHONES AND OF IRREGULARITIES IN MEAL COUNTS ARE
MATTERS OF CONTRACT ADMINISTRATION AND HAVE NO RELATIONSHIP TO THE AWARD
UNDER THE INSTANT INVITATION.
IN A LETTER DATED AUGUST 27, 1965, TO THE OFFICE OF SPECIAL
INVESTIGATIONS, BIGGS AIR FORCE BASE, TEXAS, COPY TO THIS OFFICE, YOU
FURTHER ALLEGED THAT THE GELBER COMPANY WAS NOT FURNISHING THE REQUIRED
NUMBER OF EMPLOYEES OR, IN SOME CASES, PROPERLY QUALIFIED EMPLOYEES AS
REQUIRED BY THE CONTRACT.
ADMINISTRATIVE REPORTS INDICATE THAT GELBER HAS BEEN PERFORMING
SATISFACTORILY IN OPERATING THE WRAMA BASE DINING HALLS UNDER THE
CURRENT CONTRACT. AT THE INCEPTION OF THE CONTRACT GELBER WAS
TEMPORARILY UNABLE TO OBTAIN A SUFFICIENT NUMBER OF EMPLOYEES. AS OF
SEPTEMBER 8, 1965, IT WAS DETERMINED THAT THERE WERE SUFFICIENT
EMPLOYEES TO MAN THE OPERATION. IT WAS FOUND THAT THE TEMPORARY LACK OF
EMPLOYEES IN NO WAY DETRACTED FROM THE QUALITY OF SERVICE RENDERED TO
THE BASE. GELBER IS NOT ONLY SATISFYING THE TERMS OF THE CONTRACT BUT,
IN WRAMA'S OPINION, IS PROVIDING BETTER SERVICE THAN ANY OTHER COMPANY
THAT HAS HAD A CONTRACT THERE IN THE PAST SEVERAL YEARS.
IT IS ALSO NOTED THAT GELBER HAS RECEIVED LETTERS OF COMMENDATION FOR
SERVICES RENDERED AT NELLIS AIR FORCE BASE, NEVADA, AND JAMES CONNALLY
AIR FORCE BASE, TEXAS.
BASED UPON AN AFFIRMATIVE FCR AND THE FAVORABLE STATEMENT FROM THE
PRICING STAFF PLUS THE FACT THAT THE BIDDER HAD CONFIRMED HIS BID PRICE,
AN AWARD UNDER INVITATION NO. 09-603-65-121 WAS MADE TO THE IRA GELBER
COMPANY, THERE BEING NO APPARENT REASON TO QUESTION THE LOW BIDDER'S
ABILITY TO SUCCESSFULLY PERFORM THE CONTRACT. IN THE FACE OF THIS
DETERMINATION, THE MARGIN OF PROFIT UPON WHICH A BIDDER FEELS HE CAN
SUCCESSFULLY PERFORM A CONTRACT IS A MATTER OF NO CONCERN TO THE
CONTRACTING OFFICE.
THE ACTION TAKEN IN THIS PROCUREMENT APPEARS TO HAVE BEEN TAKEN IN
THE BEST INTEREST OF THE GOVERNMENT IN ACCORDANCE WITH THE
RESPONSIBILITY PLACED UPON PROCUREMENT OFFICIALS TO OBTAIN MAXIMUM
COMPETITION WHEREVER POSSIBLE IN CONNECTION WITH THE OBTAINING OF
SUPPLIES OR SERVICES FOR THE GOVERNMENT AT THE LOWEST REASONABLE PRICES.
BASED UPON THE FOREGOING, IT IS OUR OPINION THAT THE RECORD OF THIS
PROCUREMENT AFFORDS NO VALID BASIS TO SUPPORT A CONCLUSION THAT THE
CONTRACT WAS IMPROPERLY AWARDED TO THE GELBER COMPANY OR THAT THE
CONTRACT DOES NOT CONSTITUTE A VALID AND BINDING OBLIGATION ON THE PART
OF THE GOVERNMENT. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-156995, NOV. 30, 1965
TO PAUL H. WERRES COMPANY, INCORPORATED:
WE REFER TO YOUR LETTER OF OCTOBER 13, 1965, AND THE PRIOR
CORRESPONDENCE PROTESTING AGAINST THE AWARD MADE UNDER INVITATION FOR
BIDS NO. AII-18-109-65-32 COVERING THE PROCUREMENT OF A FLOOR-MOUNTED
POWER-OPERATED CONVEYER LINE FOR THE UNITED STATES ARMY AG PUBLICATIONS
CENTER, BALTIMORE, MARYLAND.
THE INVITATION WAS ISSUED ON APRIL 26, 1965. ON MAY 18, 1965, BEFORE
BIDS WERE SCHEDULED TO BE OPENED, YOUR FIRM, REPRESENTING
RAPIDS-STANDARD EQUIPMENT, PROTESTED SEVERAL REQUIREMENTS OF THE
SPECIFICATIONS, WHICH YOU MAINTAINED WERE RESTRICTIVE. THESE CONCERNED
THE BELT WIDTH, THE SPACING OF THE ROLLER TUBING CENTERS, AND THE
SEALING OF THE BALL BEARINGS. AN AMENDMENT WAS ISSUED TO CHANGE THE
SPECIFICATIONS IN ACCORDANCE WITH YOUR SUGGESTIONS, AND THE BID OPENING
DATE WAS RE-SCHEDULED TO JUNE 4, 1965. ON MAY 25, 1965, YOU WROTE TO
THE CONTRACTING OFFICE THAT THE REQUIREMENT IN PARAGRAPH 3.2 OF THE
SPECIFICATION FOR REVERSIBLE ACCUMULATION WAS UNDULY RESTRICTIVE AND
WITHOUT A PERFORMANCE SUBSTANTIATION. THIS FEATURE REQUIRED THAT THE
MACHINE OPERATE AND ACCUMULATE MATERIAL IN EITHER DIRECTION. THE
CONTRACTING OFFICER NOTIFIED THE USING ACTIVITY OF YOUR OBJECTION, BUT
THE USER REQUESTED THAT THE REVERSIBLE FEATURE REMAIN IN THE
SPECIFICATION, AND NO FURTHER CHANGES WERE MADE. ON JUNE 4, 1965, ONE
BID WAS RECEIVED AND OPENED, FROM MATHEWS CONVEYER COMPANY IN THE AMOUNT
OF $5,487, AND ON JUNE 7, 1965, AWARD WAS MADE TO MATHEWS AT THE BID
PRICE. (WE UNDERSTAND THAT THE WORK HAS BEEN COMPLETED.)
THE CONTRACTING OFFICER STATES THAT THE REVERSIBLE ACCUMULATION
CONVEYER IS OF GREAT ADVANTAGE IN THE EVENT OF OVERLOADING OR STOPPAGE;
THAT A CONVEYER WITH THIS FEATURE MAY ACCOMMODATE BOTH INCOMING AND
OUTGOING SHIPMENTS AND THUS SERVE IN LIEU OF TWO CONVEYER LINES, WHICH
RESULTS IN A SUBSTANTIAL SAVINGS TO THE GOVERNMENT; AND THAT IT RESULTS
IN A BETTER REGULATION OF FLOW OF MATERIAL AND A MORE ECONOMIC
UTILIZATION OF FLOOR SPACE.
THE CONTRACTING OFFICER ESTIMATES THE ADDITIONAL COST FOR REVERSING
CAPABILITY ON THE EQUIPMENT PROCURED AS APPROXIMATELY $50, AND HE
REPORTS THAT AT LEAST TWO FIRMS IN ADDITION TO MATHEWS COULD
READILY OFFER REVERSIBLE ACCUMULATION BUT DID NOT BID FOR OTHER
REASONS. HE SAYS THAT THE PRICE PAID FOR THE EQUIPMENT WAS DETERMINED
TO BE REASONABLE BY APPLYING "THE GENERAL RULE OF THUMB" PRICE OF $40
PER LINEAL FOOT FOR THE 130-FOOT LONG CONVEYER WHICH WAS SPECIFIED.
YOU INQUIRE WHETHER A USER WOULD WANT TO REVERSE AN ENTIRE LINE OF
ITEMS SIMPLY TO RETURN AND REMOVE ONE BOX. IN ANY EVENT, YOU CONTEND
THAT THE REVERSIBLE ACCUMULATION FEATURE REPRESENTS A REQUIREMENTS WHICH
IS NOT CURRENTLY NEEDED BY USING ACTIVITIES, BUT WHICH FEATURE RESULTS
IN RESTRICTING COMPETITION TO ONE FIRM, THUS CAUSING THE GOVERNMENT TO
PAY AN UNREASONABLY HIGH PRICE FOR THE EQUIPMENT.
ALSO, YOU NOTE THAT ONE BID WAS RECEIVED AND THAT THE CONTRACTING
OFFICER MADE NO INQUIRY WITH ANY OTHER CONVEYER MANUFACTURER PRIOR TO
BID OPENING CONCERNING THE REVERSIBLE ACCUMULATION FEATURE. IT IS YOUR
CONCLUSION THAT THE GOVERNMENT WILL CONTINUE TO RECEIVE ONLY ONE BID IF
IT CONTINUES TO SPECIFY THIS FEATURE. YOU ASK THAT THE AWARD BE SET
ASIDE; THAT THE ARMY BE DIRECTED TO REVIEW THE REQUIREMENT FOR THE
REVERSIBLE ACCUMULATION FEATURE; AND THAT IT BE DIRECTED TO DRAFT A
SPECIFICATION IN COORDINATION WITH THE CONVEYER INDUSTRY TO REFLECT THE
TRUE NEEDS OF THE GOVERNMENT.
YOUR INITIAL OBJECTION TO THE SPECIFICATIONS CONCERNED CERTAIN DESIGN
FEATURES (BELT WIDTH, ROLLER SPACING AND SEALING OF BALL BEARINGS).
ARMY DETERMINED THAT THE EQUIPMENT COULD BE MANUFACTURED UNDER A
BROADENED SPECIFICATION. ACCORDINGLY, THE SPECIFICATIONS WERE CHANGED.
IN THIS CONNECTION, THE RULE IS THAT A SPECIFICATION SHOULD BE DRAFTED
TO PERMIT THE BROADEST FIELD OF COMPETITION MEETING THE NEEDS OF THE
AGENCY. SEE 38 COMP. GEN. 610, 611. THUS AN AGENCY SHOULD NOT SPECIFY
DESIGN FEATURES WHICH REQUIRE THE USE OF A PARTICULAR MANUFACTURER'S
PRODUCT WHERE THE PRODUCTS OF OTHER MANUFACTURERS WOULD SERVE AS WELL.
39 COMP. GEN. 101. YOUR PRESENT OBJECTION, HOWEVER, IS AGAINST THE USE
OF A CONVEYER WHICH IS CAPABLE OF PERFORMING IN REVERSE. A
SPECIFICATION IS NOT RESTRICTIVE MERELY BECAUSE IT REQUIRES A
PERFORMANCE FEATURE WHICH ONE MANUFACTURER OR EVEN MOST MANUFACTURERS
ARE UNABLE OR UNWILLING TO MEET. THE GOVERNMENT IS NOT REQUIRED TO BUY
EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING
AGENCY, REASONABLY MEET ITS NEEDS. 36 COMP. GEN. 251, 252.
WE SEE NO REASON TO QUESTION WHY AN AWARD WAS MADE SOON AFTER THE
BIDS WERE OPENED. INFORMATION WAS AT HAND TO INDICATE THAT THE SOLE
BIDDER OFFERED A REASONABLE PRICE, AND THE BIDDER'S QUALIFICATIONS WERE
KNOWN.
ACCORDINGLY, WE CANNOT SAY THAT THE SPECIFICATIONS WERE UNDULY
RESTRICTIVE OR THAT AN IMPROPER AWARD WAS MADE. YOUR PROTEST MUST BE
DENIED.
HOWEVER, BY LETTER OF TODAY, WE ARE FORWARDING TO THE SECRETARY OF
THE ARMY YOUR LETTER OF OCTOBER 13, 1965, SUGGESTING THE DESIRABILITY OF
COORDINATING SPECIFICATIONS FOR THIS EQUIPMENT WITH INDUSTRY PRIOR TO
THE ISSUANCE OF ANY FUTURE INVITATIONS.
B-157894, NOV. 30, 1965
TO R. MULLER CONSTRUCTION CORPORATION:
YOUR LETTER OF OCTOBER 19, 1965, PROTESTS THE REJECTION OF YOUR BID
ON GENERAL SERVICES ADMINISTRATION (GSA) PROJECT NO. 58528, ON THE
GROUND THAT YOU HAD FAILED TO ACKNOWLEDGE AN AMENDMENT TO THE INVITATION
FOR BIDS (IFB) RELATING TO MINIMUM WAGE RATES FIXED BY THE SECRETARY OF
LABOR.
THE IFB, DATED AUGUST 9, 1965, AND BEARING THE SAME IDENTIFYING
NUMBER AS THE PROJECT, SOLICITED BIDS FROM SMALL BUSINESS CONCERNS FOR
THE EXTENSION AND MODERNIZATION OF THE UNITED STATES POST OFFICE AT
NORTHPORT, NEW YORK. BID OPENING WAS SCHEDULED FOR SEPTEMBER 9, 1965.
SECTION 1 OF THE LABOR STANDARDS PROVISIONS, STANDARD FORM 19-A, OF THE
IFB PROVIDED FOR THE PAYMENT, PURSUANT TO THE DAVIS-BACON ACT, 40 U.S.C.
276A-7, OF MINIMUM WAGE RATES AS PRESCRIBED IN A WAGE DETERMINATION
DECISION OF THE SECRETARY OF LABOR. SECTION 3-3 OF THE SPECIFICATIONS
OF THE IFB, RELATING TO SUCH MINIMUM WAGE RATES (GSA FORM 1083) READS AS
FOLLOWS:
"3-3. THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR IS
ATTACHED SOLELY FOR THE PURPOSE OF SETTING FORTH THE MINIMUM HOURLY WAGE
RATES REQUIRED TO BE PAID DURING THE LIFE OF THE CONTRACT AND IS NOT TO
BE ACCEPTED AS A GUARANTEE, WARRANTY OR REPRESENTATION AS TO THE WAGE
RATES INDICATED. UNDER NO CIRCUMSTANCES SHALL ANY MISTAKE IN ATTACHING
THE APPROPRIATE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR
AND IN THE WAGE RATES SET FORTH ENTITLE THE SUCCESSFUL BIDDER TO
CANCELLATION OF HIS BID OR CONTRACT OR TO ANY INCREASE IN THE CONTRACT
PRICE OR OTHER ADDITIONAL PAYMENT OR RECOVERY.'
SINCE COPIES OF THE WAGE RATE DECISION WERE NOT AVAILABLE AT THE TIME
THE IFB PAPERS WERE ASSEMBLED FOR DISTRIBUTION TO PROSPECTIVE BIDDERS,
THERE WAS INSERTED IN THE IFB IMMEDIATELY PRECEDING GSA FORM 1083 A PAGE
NUMBERED 3-1, WHICH MADE REFERENCE TO THE APPLICABLE MINIMUM HOURLY WAGE
RATES REQUIRED BY SECTION 3 AND STATED: "THIS SECTION OF THE
SPECIFICATIONS WILL BE ISSUED PRIOR TO BID OPENING DATE.'
THE IFB PAPERS ALSO INCLUDED GSA FORM 1903, NOTICE TO BIDDER
(CONSTRUCTION CONTRACT), WHICH LISTED THE FOLLOWING AMONG VARIOUS
REQUIREMENTS TO BE CHECKED BY BIDDERS BEFORE BID SUBMISSION:
"3. HAVE YOU ACKNOWLEDGED, ON THE SF-21, BID FORM, RECEIPT OF ALL
AMENDMENTS (IF ANY) ISSUED TO THE SPECIFICATIONS? "
ON AUGUST 18, GSA ISSUED AMENDMENT NO. 1 TO THE IFB FURNISHING TO
BIDDERS WAGE RATE DECISION NO. AE-1095, ISSUED JULY 23, 1965, BY THE
SECRETARY OF LABOR, SETTING FORTH THE MINIMUM WAGE RATES
FOR THE PROJECT, TO BE INSERTED IN THE IFB IN PLACE OF PAGE 3-1. TH
AMENDMENT CARRIED A NOTATION READING AS FOLLOWS:
"IMPORTANT - BIDDER MUST ACKNOWLEDGE THE RECEIPT OF THIS AMENDMENT ON
THE BID FORM, GIVING THE NUMBER AND DATE. FAILURE TO DO SO MAY BE
GROUNDS FOR REJECTION OF THE BID.'
EIGHT BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 9. YOUR BID, DATED
SEPTEMBER 9, IN THE AMOUNT OF $243,190, WAS LOW; ANDERSON CONSTRUCTION
COMPANY, INC., WITH A BID OF $251,197, WAS SECOND OW; AND
KENSIL-HEDEMAN COMPANY, INC., WITH A BID OF $252,350 WAS THIRD LOW. THE
FIVE REMAINING BIDS RANGED FROM $257,800 TO $377,000. THE GOVERNMENT
ESTIMATE WAS $307,800.
UPON EXAMINATION OF THE BIDS, IT WAS DISCOVERED THAT NEITHER YOU NOR
ANDERSON HAD ACKNOWLEDGED THE AMENDMENT. ACCORDINGLY, THE TWO LOW BIDS
WERE DETERMINED TO BE NONRESPONSIVE AND WERE REJECTED UNDER FEDERAL
PROCUREMENT REGULATIONS (FPR) 1-2.404-2 (A), WHICH PROVIDES FOR
REJECTION OF BIDS WHICH FAIL TO CONFORM TO AN ESSENTIAL REQUIREMENT OF
AN IFB. NOTIFICATION OF THE REJECTIONS WAS EFFECTED BY LETTERS DATED
SEPTEMBER 24.
YOUR POSITION, AS STATED IN CORRESPONDENCE WITH GSA AND IN YOUR
LETTER OF OCTOBER 19, IS THAT THE REJECTION OF YOUR BID, WHICH WAS MORE
THAN $9,000 LOWER THAN THE THIRD LOW BID, WAS AN ARBITRARY AND
CAPRICIOUS ACTION ON THE PART OF GSA. IN THIS CONNECTION, YOU MAKE THE
FOLLOWING POINTS:
1. NEITHER YOU NOR AT LEAST TWO OTHER BIDDERS RECEIVED AMENDMENT NO.
1.
2. AS A UNION CONTRACTOR, YOU ALREADY PAY TO YOUR EMPLOYEES WAGE
RATES WHICH EXCEED THE MINIMUM PRESCRIBED IN THE DECISION OF THE
SECRETARY OF LABOR; THEREFORE, THE PRESCRIBED RATES ARE ONLY ACADEMIC
TO YOUR BID AND COULD NOT AFFECT THE NONRECEIPT OF THE IFB AMENDMENT,
THUS MAKING THE DEFICIENCY PURELY MINOR OR TECHNICAL.
3. IN VIEW OF THE PROVISION IN SECTION 3-3 OF THE SPECIFICATIONS OF
THE IFB QUOTED ABOVE PRECLUDING THE SUCCESSFUL BIDDER FROM CANCELING HIS
BID OR RECEIVING ANY CONTRACT PRICE INCREASE OR OTHER RELIEF INCIDENT TO
ANY MISTAKE IN ATTACHING THE APPROPRIATE WAGE DETERMINATION TO THE IFB,
YOUR FAILURE TO ACKNOWLEDGE THE AMENDMENT DOES NOT GIVE YOU A "LOOPHOLE"
IN THE EVENT YOU SEEK TO EVADE THE CONTRACT REQUIREMENTS.
4. THE GOVERNMENT SHOULD NOT OVERLOOK THE SAVINGS OF $9,000 THAT
WOULD BE REALIZED FROM ACCEPTANCE OF YOUR BID.
ACCORDINGLY, YOU REQUEST THAT OUR OFFICE ASSIST IN RECTIFYING THE
SITUATION.
AN INVESTIGATION BY GSA REGARDING THE DISTRIBUTION OF THE AMENDMENT
IN QUESTION DISCLOSED THAT ON AUGUST 20, THE AMENDMENT WAS MAILED TO YOU
AND TO 20 OTHER GENERAL CONTRACTORS AND TO OTHERS WHO HAD RECEIVED THE
IFB UP TO THAT DATE. SUBSEQUENTLY, COPIES OF THE AMENDMENT WERE
INCLUDED WITH THE BID FORMS FORWARDED IN RESPONSE TO REQUESTS FOR THE
IFB RECEIVED AFTER AUGUST 20.
SECTION 1 OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, DIRECTS THAT
CONTRACTS FOR CONSTRUCTION, ALTERATION AND/OR REPAIR, INCLUDING PAINTING
AND DECORATING OF PUBLIC BUILDINGS OR PUBLIC WORKS, SHALL CONTAIN
CERTAIN MINIMUM WAGE REPRESENTATIONS AND STIPULATIONS. WE HAVE HELD
THAT A BLANKET PROVISION IN SPECIFICATIONS THAT CONTRACTORS SHALL PAY
MINIMUM WAGE RATES, REGARDLESS OF WHETHER THE WAGE RATE DETERMINATIONS
ARE RECEIVED BEFORE OR AFTER BID OPENING, DOES NOT MEET THE STATUTORY
REQUIREMENT. 40 COMP. GEN. 48. IN THE INSTANT CASE, HOWEVER, THE
LANGUAGE ON PAGE 3-1 OF THE SPECIFICATIONS PLACED ALL BIDDERS ON NOTICE
THAT THE APPLICABLE MINIMUM WAGE RATES REQUIRED BY SECTION 3 WOULD BE
ISSUED PRIOR TO THE BID OPENING DATE, AND THAT SUCH WAGE RATES WERE TO
BE CONSIDERED IN PREPARING BIDS UNDER THE IFB. ACCORDINGLY, IT IS OUR
VIEW THAT THE REQUIREMENT OF THE DAVIS-BACON ACT WAS NOT MET UNTIL
AUGUST 20, THE DATE THE AMENDMENT WAS ISSUED FURNISHING THE WAGE RATE
SCHEDULE. B-157832, NOVEMBER 3, 1965.
TURNING NOW TO THE EFFECT OF YOUR FAILURE TO ACKNOWLEDGE THE
AMENDMENT, IT IS THE GENERAL RULE THAT IF AN ADDENDUM TO AN INVITATION
AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, THE FAILURE
OF THE BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE
INVITATION RENDERS THE BID NONRESPONSIVE AND CANNOT BE WAIVED. 37 COMP.
GEN. 785. THE BASIS FOR SUCH RULE IS THAT GENERALLY THE BIDDER WHO
FAILS TO SO ACKNOWLEDGE WOULD HAVE AN OPTION TO DECIDE AFTER BID OPENING
TO BECOME ELIGIBLE FOR AWARD BY FURNISHING EXTRANEOUS EVIDENCE THAT THE
ADDENDUM HAD BEEN CONSIDERED, OR TO AVOID AWARD BY REMAINING SILENT.
SEE 41 COMP. GEN. 550 AND DECISIONS THEREIN CITED.
THE PROCUREMENT REGULATION WHICH GOVERNS WAIVER OF MINOR
INFORMALITIES OR IRREGULARITIES IN BIDS SUBMITTED UNDER GSA INVITATIONS
TO BID IS FPR 1-2.405, WHICH READS, IN PART, AS FOLLOWS:
"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:
"/1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE
AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE
INVITATION FOR BIDS AND THE BIDDER SUBMITTED A BID THEREON; OR
"/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.'
SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECT THE
CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION
REQUIRING PAYMENT OF THE MINIMUM RATES PRESCRIBED BY THE SECRETARY OF
LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED
PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE
AMENDMENT FURNISHING THE MINIMUM WAGE RATE SCHEDULE WAS ISSUED, THE
PURPOSE OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE
CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM RATES TO BE PAID
THEREUNDER. 17 COMP. GEN. 471, 473. IN SUCH CIRCUMSTANCES, IT IS OUR
VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE
AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE RATE
DETERMINATION COULD NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY THE
WAGE RATES PRESCRIBED THEREIN BUT NOT SPECIFIED IN THE ORIGINAL IFB,
NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER RATES
TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS. ACCORDINGLY, IN
OUR OPINION, THE DEVIATION WAS MATERIAL AND NOT SUBJECT TO WAIVER UNDER
THE PROCUREMENT REGULATION. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY
AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY
THE WAGE RATE SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS
CONFORMED TO THE REQUIREMENTS OF THE AMENDED IFB, AND WOULD BE CONTRARY
TO THE PURPOSE OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28,
1962; B-146354, NOVEMBER 27, 1961.
REGARDING YOUR ALLEGED NONRECEIPT OF THE IFB AMENDMENT, THE RECORD
SHOWS THAT THE AMENDMENT WAS MAILED TO YOU APPROXIMATELY THREE WEEKS
BEFORE BID OPENING. HOWEVER, EVEN WHEN THE NONRECEIPT BY
BIDDER OF A MATERIAL IFB AMENDMENT IS ATTRIBUTABLE TO THE GOVERNMENT
NO EXCEPTION IS WARRANTED TO THE RULE PRECLUDING CONSIDERATION OF LATE
BIDS OR MODIFICATIONS TO THE PREJUDICE OF OTHER BIDDERS. 40 COMP. GEN.
126.
CONCERNING THE SAVINGS OF $9,000 WHICH COULD BE REALIZED BY AN AWARD
TO YOU, IT HAS LONG BEEN HELD THAT IT IS INFINITELY MORE IN THE PUBLIC
INTEREST TO ABIDE BY THE RULES OF COMPETITIVE BIDDING THAN TO OBTAIN A
PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY THE VIOLATION OF SUCH RULES.
17 COMP. GEN. 554 (1938).
FOR THE REASONS STATED, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE
GSA ACTION IN REJECTING YOUR BID AS NONRESPONSIVE, AND YOUR PROTEST IS
THEREFORE DENIED.
B-146780, NOV. 29, 1965
TO HONORABLE WILLIAM B. PETTY, DIRECTOR, DEFENSE CONTRACTS AUDIT
AGENCY:
YOUR LETTER OF OCTOBER 28, 1965, ENCLOSES A COPY OF AN APPEAL AND
REVIEW BRIEF OF GRUMMAN AIRCRAFT ENGINEERING CORPORATION (GRUMMAN)
DIRECTED TO CERTAIN DISAPPROVALS ISSUED BY THE COGNIZANT DEPARTMENT OF
DEFENSE AUDITS UNDER NAVY COST-TYPE CONTRACTS NOAS 57-628C AND NOW
61-0035A. THE DISAPPROVALS RELATE TO GROUP INSURANCE PREMIUM REFUNDS
RECEIVED BY GRUMMAN DURING THE PERIOD 1953-1962 AND USED BY GRUMMAN TO
PAY ITS EMPLOYEES' SHARE OF THE GROUP INSURANCE PREMIUMS. THE
DISAPPROVALS WERE MADE ON THE BASIS OF A REPORT OF THE OFFICE DATED
JANUARY 13, 1964, B-146780.
YOU HAVE REVIEWED GRUMMAN'S APPEAL AND IT IS YOUR DECISION THAT
GRUMMAN'S USE OF THE REFUNDS HAS RESULTED IN A SIMULTANEOUS CLAIM FOR
AND REIMBURSEMENT OF ADDITIONAL GROUP INSURANCE PREMIUM COSTS; AND
THAT, FOR THE REASONS SET FORTH IN YOUR DECISION, THE ADDITIONAL COSTS
ARE CONSIDERED REASONABLE AND ALLOWABLE. YOU ENCLOSE A COPY OF THE
DECISION, WHICH IS AS YET UNISSUED, AND REQUEST OUR CONCURRENCE THEREIN.
IN LIGHT OF THE FACTS AND CIRCUMSTANCES SET FORTH IN YOUR UNISSUED
DECISION, AND FOR THE SAME REASONS AS SET FORTH THEREIN, WE WOULD RAISE
NO LEGAL OBJECTION TO YOUR PROPOSED DECISION IN THE MATTER.
B-153801, NOV. 29, 1965
TO MR. CHARLES V. WOOD:
WE ARE IN RECEIPT OF YOUR LETTER OF NOVEMBER 15, 1965, FURTHER
INQUIRING RELATIVE TO YOUR CLAIM FOR ARREARS OF PAY AND ALLOWANCES
BELIEVED TO BE DUE INCIDENT TO YOUR SERVICE IN THE ARMY OF THE UNITED
STATES DURING THE PERIOD MARCH 23, 1943, TO NOVEMBER 16, 1945.
IT APPEARS FROM YOUR LETTER THAT NOTWITHSTANDING THE DETAILED
EXPLANATIONS WHICH WERE FURNISHED IN OUR DECISION OF APRIL 29, 1964,
B-153801, AND LETTERS OF MAY 21 AND JULY 1, 1964, TO YOU, AND IN OUR
LETTER OF NOVEMBER 10, 1965, TO THE HONORABLE WILLIAM M. TUCK, UNITED
STATES HOUSE OF REPRESENTATIVES, A COPY OF WHICH LETTER APPARENTLY IS IN
YOUR POSSESSION, CONCERNING ALL ITEMS COMPRISING YOUR CLAIM, YOU STILL
BELIEVE THAT THE ARMY HAS PAID YOU ONLY PART OF THE AMOUNT DUE YOU AS
PAY AND ALLOWANCES FOR YOUR MILITARY SERVICE, AND THAT THE ACT OF
OCTOBER 9, 1940, 54 STAT. 1061, 31 U.S.C. 71A, IS NOT FOR APPLICATION
IN YOUR CASE TO BAR YOUR CLAIM FOR ANY UNPAID AMOUNT.
AS YOU WERE ADVISED IN THE ABOVE DECISION AND LETTERS, THIS OFFICE IS
PROHIBITED BY THE ACT OF OCTOBER 9, 1940, FROM CONSIDERING YOUR CLAIM
BECAUSE IT WAS NOT TIMELY FILED HERE, AND THEREFORE, WE ARE WITHOUT
LEGAL AUTHORITY TO CONSIDER YOUR CLAIM FOR ANY AMOUNTS WHICH YOU BELIEVE
TO BE DUE. YOU WERE ALSO ADVISED, HOWEVER, THAT THE RECORD INDICATES
THAT YOU HAVE BEEN PAID ALL PAY AND ALLOWANCES DUE YOU ON ACCOUNT OF
YOUR MILITARY SERVICE.
SINCE YOUR LETTER IS MERELY A REITERATION OF INFORMATION WHICH
PREVIOUSLY WAS BEFORE US FOR CONSIDERATION, WE HAVE NO ALTERNATIVE BUT
TO AGAIN ADVISE YOU THAT FURTHER ACTION ON YOUR CLAIM IS EXPRESSLY
PRECLUDED BY LAW. CONSEQUENTLY, YOU ARE AGAIN ADVISED THAT FURTHER
CORRESPONDENCE FROM YOU ON THIS MATTER WILL SERVE NO USEFUL PURPOSE AND
WILL BE FILED WITHOUT REPLY.
IN ANSWER TO YOUR QUERY, THE FINANCE CENTER, U.S. ARMY, INDIANAPOLIS,
INDIANA, HAS FORWARDED TO THIS OFFICE SEVERAL LETTERS WHICH YOU HAVE
WRITTEN TO THEM CONCERNING YOUR CLAIM.
B-156711, NOV. 29, 1965
TO FOOD INDUSTRIES RESEARCH AND ENGINEERING:
WE REFER TO YOUR LETTER OF APRIL 29, 1965, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING AGAINST THE NEGOTIATION OF CONTRACT NO.
AT/45-1/-1820 WITH THE COMPUTER SCIENCES CORPORATION FOR THE PERFORMANCE
OF AUTOMATIC DATA PROCESSING (ADP) SERVICES AT THE ATOMIC ENERGY
COMMISSION (AEC) FACILITY AT HANFORD, WASHINGTON.
ON SEPTEMBER 28, 1964, THE AEC ISSUED A REQUEST FOR PROPOSALS TO
OBTAIN THE FOLLOWING OBJECTIVES IN CONTRACTING FOR MANAGEMENT-TYPE ADP
SERVICES:
"A. TO OBTAIN A SINGLE COMPUTER CENTER IN THE RICHLAND AREA,
RICHLAND AND WILL ASSURE THAT COMPUTING AND DATA PROCESSING SERVICES ARE
PROVIDED TO THE COMMISSION (CUSTOMER) CONTRACTORS AT SERVICE LEVELS
CONSISTENT WITH AND ESSENTIAL TO THEIR PRESENT REQUIREMENTS AND FUTURE
GROWTH AND DEVELOPMENT; AND
"B. TO AUGMENT DIVERSIFICATION OF THE ECONOMY OF THE AREA. THE
SELECTED CONTRACTOR WILL BE EXPECTED TO EXERT MAXIMUM EFFORT IN
ESTABLISHING WITH PRIVATE CAPITAL A REGIONAL COMPUTER CENTER IN RICHLAND
FROM WHICH PRIVATE WORK CAN BE PERFORMED IN ADDITION TO THE COMMISSION
WORK. TO FURTHER ENCOURAGE THE DEVELOPMENT OF PRIVATE WORK, THE
COMMISSION WILL PERMIT THE SELECTED CONTRACTOR TO USE THE COMMISSION'S
EXISTING FACILITIES AND EQUIPMENT IN THE PERFORMANCE OF PRIVATE WORK ON
THE TERMS AND CONDITIONS OUTLINED ELSEWHERE IN THIS LETTER AND ITS
ATTACHMENTS.'
INTERESTED ADP FIRMS WERE ADVISED THAT SELECTION OF THE SUCCESSFUL
CONTRACTOR WOULD BE BASED ON ALL PERTINENT FACTORS INCLUDING:
"/1) FIRM'S BACKGROUND AND EXPERIENCE IN ACTUALLY MANAGING AND
ECONOMICALLY OPERATING COMPUTER AND DATA PROCESSING FACILITIES INVOLVING
ORGANIZATIONS WITH A DIVERSITY OF SKILL AND CAPABILITIES.
"/2) EVIDENCE OF SATISFACTORY LABOR RELATIONS AND SALARY AND WAGE
ADMINISTRATION.
"/3) DEGREE OF INTEREST AND EXPECTED SUPPORT OF FIRM'S TOP
MANAGEMENT.
"/4) EXPERIENCE AND QUALIFICATIONS OF PERSONNEL PRESENTLY EMPLOYED BY
THE FIRM AND PROPOSED FOR ASSIGNMENT TO KEY MANAGEMENT AND TECHNICAL
POSITIONS IN THE PROPOSED WORK.
"/5) DEGREE OF INTEREST EVIDENCED BY PROPOSER IN PLANNING WAYS AND
MEANS TO SECURE OUTSIDE PRIVATE WORK WHICH COULD BENEFICIALLY ASSIST IN
DEVELOPMENT OF INDUSTRY IN THE RICHLAND COMMUNITY, E.G. AMOUNT OF EFFORT
AND THE SIZE OF THE MARKETING STAFF TO BE ENGAGED IN SOLICITING PRIVATE
BUSINESS FOR THE RICHLAND COMMUNITY.'
SIX PROPOSALS WERE SUBMITTED AND, AFTER EVALUATION AND NEGOTIATION,
IT WAS DETERMINED BY AEC THAT COMPUTER SCIENCES WAS THE BEST QUALIFIED
FIRM TO MANAGE AND OPERATE THE ADP FACILITIES AT HANFORD. WE ARE
ADVISED BY THE AEC THAT COMPUTER SCIENCES OFFERED TO ESTABLISH AT
HANFORD A NORTHWEST COMPUTER SCIENCES CENTER. THIS WOULD INCLUDE THE
INSTALLATION OF THE UNIVAC 1107 COMPUTER, IMMEDIATE INSTALLATION OF
REMOTE DATA LINK EQUIPMENT IN THE LABORATORIES FOR TRANSMISSION OF
OFF-SITE LOAD TO THEIR EL SEGUNDO (LOS ANGELES) CENTER PENDING THE
UNIVAC 1107 INSTALLATION, AND USING THE REMOTE DATA LINK DEVELOPMENT TO
LINK ALL PRINCIPAL CITIES OF THE NORTHWEST TO RICHLAND AS A HUB AND
REGIONAL NETWORK. COMPUTER SCIENCES COMMITTED ITS FINANCIAL RESOURCES
TO THE INITIATION AND SUCCESSFUL CONTINUATION OF THE DIVERSIFICATION
PROJECT; AND IT ALSO COMMITTED THE INVESTMENT OF ITS FIXED FEES
RECEIVED BY AEC AS WELL AS ITS OWN CAPITAL FUNDS INTO THE EXPANSION OF
THE CENTER. WE ARE FURTHER ADVISED THAT THE PROGRAMS WILL BE CARRIED
OUT BY COMPUTER SCIENCES WITH ITS OWN CAPITAL AND EQUIPMENT, AND THAT
PRESENT HANFORD PROGRAM DEMANDS FOR COMPUTER SERVICES EXCEEDS BY 20 TO
25 PERCENT THE CAPACITY OF ALL INSTALLED GOVERNMENT COMPUTER EQUIPMENT
AND REQUIRES INSTALLATION OF ADDITIONAL COMPUTER CAPACITY WHICH COMPUTER
SCIENCES IS OBLIGATED UNDER ITS CONTRACT TO INSTALL AT ITS OWN EXPENSE.
THIS CONTRACT WITH COMPUTER SCIENCES IS A COST-TYPE MANAGEMENT CONTRACT
UNDER WHICH COMPUTER SCIENCES WILL OPERATE GOVERNMENT-OWNED FACILITIES
AND PROVIDE COMPUTER SERVICES TO AEC AND ITS OTHER MANAGEMENT
CONTRACTORS AT RICHLAND IN CARRYING OUT AEC PROGRAMS. AS PROVIDED ON
THE REQUEST FOR PROPOSALS, COMPUTER SCIENCES WAS REQUIRED, AS A
CONDITION OF HAVING ITS PROPOSAL CONSIDERED, TO ACCEPT IN PRINCIPLE
AEC'S STANDARD ALLOWABLE COST PROVISIONS AND TO AGREE TO THE PROPOSED
FEE RANGE. AEC ADVISES THAT THE STANDARD ALLOWABLE COST PROVISION AND
FEE RANGES WERE IN NO WAY ALTERED BECAUSE OF THE INCLUSION IN THE
REQUEST FOR PROPOSALS OF A DIVERSIFICATION FACTOR.
THE COMPUTER SCIENCES' CONTRACT, IN ACCORDANCE WITH THE REQUEST FOR
PROPOSALS, RECOGNIZES THAT SPACE IN A GOVERNMENT BUILDING WOULD BE MADE
AVAILABLE, ALONG WITH GOVERNMENT-OWNED EQUIPMENT AND FACILITIES, FOR THE
PERFORMANCE OF PRIVATE ADP SERVICES. THE USE OF SUCH SPACE, FACILITIES
AND EQUIPMENT IS COVERED BY AN AEC USE PERMIT ARRANGEMENT WHEREUNDER A
USE CHARGE WILL BE PAID.
YOU QUESTION THE AUTHORITY OF AEC TO ENTER INTO SUCH A CONTRACT AND
AFTER PROTESTING TO OUR OFFICE YOU FILED AN ACTION IN THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT OF WASHINGTON, SOUTHERN
DIVISION, FRUIT INDUSTRIES RESEARCH FOUNDATION, A CORPORATION D/B/A)
FOOD INDUSTRIES RESEARCH AND ENGINEERING; ET AL. V. A.E.C., UNITED
STATES OF AMERICA, ET AL., CIVIL NO. 2089. BY ORDER DATED OCTOBER 15,
1965, THE COURT DENIED YOUR MOTION FOR PRELIMINARY INJUNCTION AND
DISMISSED THE ACTION ON THE FOLLOWING GROUNDS:
"THE PLAINTIFFS, FRUIT INDUSTRIES RESEARCH FOUNDATION, AND OTHERS IN
THE COMPUTER FIELD NOW ATTACK THE AWARD OF THE CONTRACT TO COMPUTER
SCIENCES CORPORATION. THEY ALLEGE THAT THE ATOMIC ENERGY ACTS ARE
UNCONSTITUTIONAL, THAT THE AWARD TO COMPUTER SCIENCES WAS ARBITRARY AND
CAPRICIOUS, THAT THE ATOMIC ENERGY ACT GIVES NO AUTHORITY FOR THE
COMMISSION TO MAKE ANY SUCH CONTRACT, AND THAT THEY WILL BE DEPRIVED OF
THEIR PROPERTY WITHOUT DUE PROCESS OF LAW.
"BY WAY OF RELIEF, THEY PRAY FOR AN INJUNCTION AGAINST THE CARRYING
OUT OF THE CONTRACT.
"THE PRIMARY CONCERN OF THE PLAINTIFFS IS THE CONTRACTEE'S RIGHT TO
USE THE OFFICE SPACE AND THE COMPUTER MACHINERY OF THE GOVERNMENT FOR
THE CARRYING ON OF PRIVATE BUSINESS. THE CONTRACT GIVES THEM THIS
RIGHT, AND COMPUTER SCIENCES IN TURN MUST PAY THE GOVERNMENT A CHARGE
FOR THE USAGE.
"THIS DECISION TO ALLOW THE CONTRACTEE TO USE GOVERNMENT EQUIPMENT
FOR PRIVATE WORK WAS MADE AFTER A FINDING THAT ENCOURAGEMENT TO PRIVATE
INDUSTRY WAS NECESSARY FOR THE ECONOMIC BENEFIT OF THE AREA. RECENT
PLANS TO REDUCE THE NUMBER OF PRODUCTION FACILITIES AT HANFORD MAY
STRIKE HARD AT THE LOCAL ECONOMY, SINCE IT IS VERY LARGELY DEPENDENT
UPON THE HANFORD FACILITY. TO PREVENT THIS, THE GOVERNMENT IS USING
WHAT MEANS IT CAN TO ENCOURAGE PRIVATE INVESTMENT IN THE LOCAL AREA.
BY AGREEMENT, COMPUTER SCIENCES IS REQUIRED TO INVEST ALL OF THE FEES
FROM THE CONTRACT, PLUS $200,000.00 OF ITS OWN FUNDS, FOR THE EXPANSION
OF THE COMPUTER CENTER. THIS PROGRAM OF DIVERSIFICATION AND
ENCOURAGEMENT OF PRIVATE INVESTMENT HAS THE SUPPORT OF BOTH THE
CONGRESSIONAL AND LEGISLATIVE BRANCHES OF THE GOVERNMENT. SEE THE
PRESIDENT'S LETTER OF APRIL 17, 1965, TO THE ATOMIC ENERGY COMMISSION,
AND JOINT COMMITTEE REPORT OF APPROPRIATIONS CHAIRMAN, ATOMIC ENERGY
COMMISSION, AND JOINT COMMITTEE REPORT OF APPROPRIATIONS AUTHORIZATION
FOR FISCAL YEAR 1965. WHEN THE CONGRESS HAS DECIDED UPON A POLICY WHICH
IT BELIEVES WILL CONTRIBUTE TO THE WELFARE OF THE PEOPLE, THAT POLICY IS
NOT TO BE LIGHTLY TAMPERED WITH.
"CONSIDERING FIRST PLAINTIFFS' BROAD CLAIM OF UNCONSTITUTIONALITY,
COUNSEL AGREES WITH THE GENERAL DOCTRINE THAT FEDERAL STATUTES SHOULD BE
CONSTRUED SO AS TO AVOID DOUBTS AS TO CONSTITUTIONALITY. HOWEVER, IF I
FOLLOW HIS LINE OF ARGUMENT CORRECTLY, PLAINTIFFS ALLEGE THAT A
CONSTRUCTION AUTHORIZING THIS USE OF GOVERNMENT PROPERTY WOULD BE
UNCONSTITUTIONAL. THEY CONTEND IT WOULD BE UNCONSTITUTIONAL BECAUSE THE
GOVERNMENT HAS ONLY LIMITED POWERS UNDER THE CONSTITUTION, AND THE
CONSTITUTION DOES NOT AUTHORIZE THE GOVERNMENT TO CARRY ON A PRIVATE
BUSINESS.
"PLAUSIBLE AS THIS CONTENTION MAY OR MAY NOT BE, WE ARE OBLIGATED TO
CONSIDER, FIRST, THE POSTURE OF THE CASE FROM A NONCONSTITUTIONAL
STANDPOINT.
"WHAT THE PLAINTIFFS CLAIM IS THAT THEIR BUSINESS, MEANING THEIR
PROSPECTIVE CUSTOMERS, WILL BE LOST TO COMPUTER SCIENCES BECAUSE OF THE
ADVANTAGES GRANTED THEM UNDER THIS CONTRACT; THAT IS, GRANTED TO THE
SUCCESSFUL BIDDER, OR COMPUTER SCIENCES. THEY ALLEGE THE AWARD OF THE
CONTRACT AS BEING ILLEGAL; THAT IS, BEYOND THE POWER OF THE COMMISSION
TO CONCLUDE.
"IN ORDER FOR THE PLAINTIFFS TO HAVE STANDING IN THIS PROCEEDING,
THEY MUST FIRST SHOW INJURY TO A LEGALLY-PROTECTED RIGHT.
"THE INITIAL ISSUE THEREFORE, IS: DOES AN ALLEGEDLY UNLAWFUL AGENCY
ACT, WHICH RESULTS ONLY IN COMPETITIVE INJURY, GIVE THE INJURED PERSON
STANDING TO BRING AN INJUNCTIVE SUIT SUCH AS THIS?
"I THINK THE QUESTION HAS BEEN SETTLED BY A SERIES OF SUPREME COURT
CASES WHICH ARE APPLICABLE TO THE SITUATION AT BAR. AS I READ THEM, THE
CASES OF TENNESSEE ELECTRIC POWER COMPANY VERSUS TENNESSEE VALLEY
AUTHORITY, 306 U.S. 118 (1939); ALABAMA POWER COMPANY VERSUS ICKES, 302
U.S. 464 (1938); KANSAS CITY POWER AND LIGHT VERSUS MCKAY, 225 FED. 2D
294 (1955); CERTIORARI, DENIED, 350 U.S. 884; AND TEXAS STATE AFL-CIO
VERSUS KENNEDY 330 FED. 2D 217 (D.C. CIR. 1964), ALL HOLD THAT ,FREEDOM
FROM COMPETITION," WHETHER THE COMPETITION BE GOVERNMENT-INITIATED OR
GOVERNMENT-SPONSORED, IS NOT A LEGALLY-PROTECTED RIGHT.
"SINCE THE PLAINTIFFS DO NOT CONTEND INJURY TO A LEGALLY-PROTECTED
INTEREST, OTHER THAN ECONOMIC COMPETITION, THE SUIT MUST BE DISMISSED
FOR LACK OF STANDING TO SUE.
"EVEN IF THE SUIT WERE NOT DISMISSED, HOWEVER, I COULD NOT, ON THE
STRENGTH OF THE SHOWING MADE HERE, GRANT A TEMPORARY INJUNCTION. IN HIS
SWORN AFFIDAVIT, MR. WAGGONER, THE ASSISTANT MANAGER FOR
ADMINISTRATION, RICHLAND OPERATIONS OFFICE, U.S. ATOMIC ENERGY
COMMISSION, STATES THAT THE PRESENT HANFORD PROGRAM DEMANDS FOR COMPUTER
SERVICES IS TWENTY TO TWENTY-FIVE PERCENT IN EXCESS OF THE GOVERNMENT
COMPUTER CAPACITY. IF THIS IS CORRECT, COMPUTER SCIENCES WILL BE UNABLE
TO USE THE GOVERNMENT COMPUTERS FOR ANY PRIVATE WORK, BECAUSE NO UNUSED
COMPUTER TIME IS AVAILABLE.
"ON THIS STATE OF FACTS, AND ASSUMING ARGUENDO THE PLAINTIFFS HAD
STANDING TO SUE, THERE IS NO ,IMMEDIATE" DANGER OF COMPETITIVE HARM TO
THE PLAINTIFFS, AT LEAST NO HARM FROM PRIVATE USE OF GOVERNMENT
COMPUTERS. SINCE A SHOWING OF AN IMMEDIATE THREAT OF IRREPARABLE INJURY
IS ONE OF THE ESSENTIALS FOR INJUNCTIVE RELIEF, I COULD NOT GRANT THE
INJUNCTION ON THE SHOWING MADE HERE.
"WHILE IT IS TRUE THAT MR. EARL CARLSEN, PRESIDENT OF THE PLAINTIFF
FRUIT INDUSTRIES RESEARCH AND ENGINEERING,"DENIES" IN HIS AFFIDAVIT THAT
THE GOVERNMENT COMPUTERS ARE PRESENTLY BEING USED
AT CAPACITY, HIS "DENIAL" IS BASED UPON BELIEF. MR. WAGGONER'S
AFFIDAVIT IS ON THE OTHER HAND A SWORN STATEMENT OF THE FACT BASED UPON
PERSONAL KNOWLEDGE.
"WEIGHING THE TWO AFFIDAVITS LEAVES THE PLAINTIFFS WANTING IN THEIR
BURDEN OF PROOF IN SHOWING IMMEDIATE INJURY.'
THE COURT THUS DISMISSED YOUR ACTION FOR LACK OF A LEGALLY PROTECTED
INTEREST. FURTHERMORE, WE ARE OF THE OPINION THE QUESTIONED CONTRACT IS
IN CONSONANCE WITH THE PROVISIONS AND OBJECTIVE OF 42 U.S.C. 2349. THAT
SECTION, WHICH SPECIFICALLY DEALS WITH THE HANFORD ATOMIC PROJECT,
AUTHORIZES THE AEC "TO LEASE LAND, AND TO SELL, LEASE, INCLUDING LEASES
WITH OPTIONS TO PURCHASE, AND OTHERWISE DISPOSE OF IMPROVEMENTS THEREON,
AND SUCH EQUIPMENT AND OTHER PERSONAL PROPERTY AS IS DETERMINED TO BE
DIRECTLY RELATED THERETO * * * UPON A DETERMINATION BY THE COMMISSION
THAT SUCH DISPOSITION WILL SERVE TO PREVENT OR REDUCE THE ADVERSE
ECONOMIC IMPACT OF ACTUAL OR ANTICIPATED REDUCTIONS IN COMMISSION
PROGRAMS IN THAT AREA * * *.' AND IT MAY BE MENTIONED THAT THE
CONTENTION ADVANCED, THAT THE "USE PERMIT" GRANTED THE CONTRACTOR IS NOT
A SALE OR LEASE OR DISPOSITION OF PROPERTY WITHIN THE MEANING OF THE
SECTION, INVOLVES A DUBIOUS DISTINCTION, ONE WHICH AT BEST LOSES SIGHT
OF THE STATED LEGISLATIVE PURPOSE THAT SUCH DISPOSITION WOULD SERVE TO
PREVENT OR REDUCE THE ADVERSE ECONOMIC IMPACT OF ACTUAL OR ANTICIPATED
REDUCTIONS IN COMMISSION PROGRAMS IN THE HANFORD PROJECT AREA.
B-157481, NOV. 29, 1965
TO PECK IRON AND METAL CO., INC. :
BY LETTER DATED AUGUST 12, 1965, YOU REQUESTED OUR DECISION ON THREE
QUESTIONS RELATIVE TO A CONTRACT AWARDED TO YOU BY THE DEFENSE SUPPLY
AGENCY (DSA) FOR THE PURCHASE OF THE AIRCRAFT CARRIER AVT-8, WHICH WAS
OFFERED FOR SALE FOR SCRAPPING PURPOSES ONLY UNDER SALE INVITATION NO.
18-6002, ISSUED JUNE 16, 1965, BY THE DEFENSE SURPLUS SALES OFFICE,
BROOKLYN, NEW YORK.
THE VESSEL WAS STRICKEN FROM THE NAVAL VESSEL REGISTER EFFECTIVE
OCTOBER 1, 1964, UPON APPROVAL BY THE SECRETARY OF THE NAVY, AS
AUTHORIZED UNDER 10 U.S.C. 7304. THE SALE OF THE VESSEL WAS INITIATED
PURSUANT TO AUTHORITY GRANTED THE SECRETARY BY 10 U.S.C. 7305.
THE RECORD SHOWS THAT PRIOR TO BID OPENING ON JULY 15,
REPRESENTATIVES OF FOUR FIRMS INSPECTED THE VESSEL, BUT YOUR BID OF
$137,206 WAS THE ONLY BID RECEIVED. ACCORDINGLY, AFTER RECEIPT OF
ANTI-TRUST CLEARANCE FROM THE DEPARTMENT OF JUSTICE, YOU WERE AWARDED
THE VESSEL ON AUGUST 3. THE VESSEL, HOWEVER, HAS REMAINED IN THE
CUSTODY OF THE NAVY AT THE NEW YORK NAVAL SHIPYARD ANNEX PENDING OUR
DECISION ON YOUR PROTEST.
UNDER ARTICLE 30 OF THE INVITATION TERMS AND CONDITIONS, THE
PURCHASER IS REQUIRED TO STRIP FROM THE VESSEL CERTAIN GOVERNMENT
PROPERTY, INCLUDING ARMOR AND STEEL PLATING, TO BE TURNED OVER TO A NAVY
INDUSTRIAL MANAGER. THE PURCHASER IS REQUIRED TO CUT THE PLATING IN
SPECIFIED SIZES FOR THE GOVERNMENT.
IN YOUR LETTER OF AUGUST 12, YOU CONTEND THAT THE REQUIREMENT IN THE
INVITATION FOR THE REMOVAL OF THE PLATING AND ITS RETURN TO THE
GOVERNMENT SUBSTANTIALLY REDUCES THE MONETARY RETURN TO THE GOVERNMENT.
IN THIS CONNECTION, YOU ASSERT THAT THE SITUATION IS SIMILAR TO THE
CIRCUMSTANCES INVOLVED IN OUR DECISION AT 43 COMP. GEN. 15 (B-150468,
JULY 2, 1963), CONCERNING THE SALE OF SURPLUS ANCHORS TO YOU, WHICH WAS
ALSO REPORTED TO THE CONGRESS IN B-146868, FEBRUARY 26, 1965. IN THAT
CASE, WE HELD THAT A SCRAPPING REQUIREMENT INCLUDED IN THE SALES
CONTRACT FOR THE PURPOSE OF AVOIDING AN ADVERSE ECONOMIC IMPACT ON THE
INDUSTRY, WHICH WOULD REDUCE THE RETURN TO THE GOVERNMENT BELOW THE FAIR
MARKET VALUE OF THE ANCHORS REQUIRED TO BE OBTAINED UNDER SECTION 203 OF
THE FEDERAL PROPERTY AND ADMINISTRATION SERVICES ACT OF 1949, 40 U.S.C.
484, WAS ILLEGAL. THE SPECIFIC QUESTIONS YOU RAISE CONCERNING THE SALE
OF THE VESSEL ARE AS FOLLOWS:
"1. IS THE CONDITION, INCLUDED IN IFB-18-6002, REQUIRING PREPARATION
OF STEEL PLATING IN CONFLICT WITH THE OPINION RENDERED IN THE ANCHOR
CASE, WHEN THIS CONDITION RESULTS IN A REDUCED RETURN TO THE GOVERNMENT?
"2. IS THE ABOVE REFERRED TO CONDITION PROPER WHEN IT RESULTS IN AN
UNDETERMINABLE COST?
"3. WOULD THERE BE MORE ECONOMY IF THE CONDITION WERE NOT INCLUDED
AND THE REQUIRED MATERIAL OR ITS SUBSTITUTE WERE OBTAINED UNDER NORMAL
PROCUREMENT ACTIVITIES? "
IN A LETTER DATED OCTOBER 11, YOU PRESENT AN ADDITIONAL QUESTION FOR
OUR DECISION IN THE EVENT WE UPHOLD THE VESSEL SALES CONTRACT
REQUIREMENTS CONCERNING THE REMOVAL OF THE PLATING. YOU ASK WHETHER IT
WOULD BE PROPER IN SUCH CIRCUMSTANCES FOR DSA TO OFFER FOR SALE A VESSEL
SUBJECT TO A REQUIREMENT THAT THE PURCHASER REMELT THE METAL PLATING AND
RECAST IT INTO VARIOUS STRUCTURAL SHAPES (E.G., I-BEAMS AND H-BEAMS)
BEFORE ITS RETURN TO THE GOVERNMENT.
ARTICLE 38 RESERVES TO THE GOVERNMENT THE RIGHT TO WITHDRAW FOR ITS
OWN USE ANY OR ALL OF THE PROPERTY COVERED BY THE SALES CONTRACT SHOULD
A BONA FIDE REQUIREMENT FOR THE PROPERTY DEVELOP OR EXIST PRIOR TO
ACTUAL REMOVAL OF THE PROPERTY FROM GOVERNMENT CONTROL, AND THE
LIABILITY OF THE GOVERNMENT IN SUCH EVENT IS LIMITED TO REFUND OF THE
CONTRACT PRICE OR SUCH PORTION THEREOF AS THE GOVERNMENT MAY HAVE
RECEIVED. ARTICLE 11 LIMITS THE LIABILITY OF THE GOVERNMENT INCIDENT TO
THE RETURN OF PROPERTY AT GOVERNMENT COST FOR THE GOVERNMENT'S BENEFIT,
OUTSIDE OF THE DIRECT COSTS INCURRED BY THE PURCHASER IN REMOVING THE
PROPERTY, TO REFUND SUCH PORTION OF THE PURCHASE PRICE AS THE GOVERNMENT
MAY HAVE RECEIVED.
IN A REPORT DATED NOVEMBER 16, 1965, WE HAVE BEEN ADVISED BY DSA THAT
SUBSEQUENT TO BOTH THE AWARD OF THE VESSEL TO YOU AND THE FILING OF YOUR
ORIGINAL REQUEST FOR DECISION WITH OUR OFFICE, VARIOUS EVENTS OCCURRED
WHICH NECESSITATE THE EXERCISE BY THE GOVERNMENT, UNDER ARTICLE 38 OF
THE SALE TERMS AND CONDITIONS, OF ITS RIGHT TO WITHDRAW THE PROPERTY AND
TO CANCEL THE SALE. BRIEFLY, AN URGENT NEED HAS ARISEN ON THE PART OF
THE NAVY FOR VARIOUS ITEMS OF EQUIPMENT LISTED ON PAGE 25 OF THE
INVITATION, WHICH YOU WERE REQUIRED TO REMOVE AND RETURN TO THE
GOVERNMENT WITHIN SPECIFIED PERIODS RANGING FROM 270 DAYS TO 1095
CALENDAR DAYS AFTER AWARD; ALSO, THE NAVY HAS AN URGENT NEED FOR OTHER
EQUIPMENT ABOARD THE VESSEL WHICH WAS NOT DESIGNATED IN THE INVITATION
AS GOVERNMENT PROPERTY. TIME WILL NOT PERMIT THE DELAY INCIDENT TO
REMOVAL OF THE ITEMS BY YOU IN THE MANNER CONTEMPLATED WHEN THE
INVITATION WAS PREPARED AND ISSUED. ADDITIONALLY, THE ATOMIC ENERGY
COMMISSION (AEC), THE GOVERNMENT AGENCY TO WHICH THE METAL PLATING IS TO
BE SENT, REPORTS THAT CHANGES IN ITS REQUIREMENTS, INVOLVING THE SIZES
TO WHICH THE PLATING IS TO BE CUT, AMONG OTHER FACTORS, WOULD REQUIRE
REVISION OF THE CONTRACT TERMS GOVERNING THE REMOVAL AND PROCESSING OF
THE PLATING. SUCH CIRCUMSTANCES, IN OUR OPINION, AFFORD ADEQUATE
JUSTIFICATION FOR THE CANCELLATION OF THE SALES CONTRACT BY DSA, WHICH,
WE UNDERSTAND, WAS EFFECTED ON NOVEMBER 16.
SINCE SUCH ACTION MAKES THE VARIOUS QUESTIONS RAISED BY YOU ACADEMIC,
WE MUST DECLINE TO RENDER AN OPINION ON THEIR MERITS.
B-157921, NOV. 29, 1965
TO THE HONORABLE ROSS D. DAVIS, EXECUTIVE ADMINISTRATOR, SMALL
BUSINESS ADMINISTRATION:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 25, 1965, AND ENCLOSURES,
REQUESTING OUR ADVICE ON THE ELIGIBILITY OF CENTRAL ARKANSAS MILK
PRODUCERS ASSOCIATION (CAMPA) FOR AWARD OF A CONTRACT UNDER INVITATION
FOR BIDS (IFB) NO. 03-65-61, A TOTAL SET-ASIDE FOR SMALL BUSINESS
CONCERNS. YOUR REQUEST IS SUBMITTED AS EXECUTIVE ADMINISTRATOR OF THE
SMALL BUSINESS ADMINISTRATION (SBA) IN THE ABSENCE OF AN APPOINTMENT OF
A SUCCESSOR TO THE FORMER SBA ADMINISTRATOR.
CAMPA IS THE LOW BIDDER UNDER THE SUBJECT INVITATION FOR SUPPLYING
BLYTHEVILLE AIR FORCE BASE, BLYTHEVILLE, ARKANSAS, MILK AND MILK
PRODUCTS, AND IS THE PRESENT SUPPLIER OF SUCH PRODUCTS UNDER THE CURRENT
CONTRACT WHICH WAS ALSO A TOTAL SET-ASIDE FOR SMALL BUSINESS CONCERNS.
IN CONNECTION WITH AWARD OF THE PRESENT CONTRACT, CAMPA'S SMALL BUSINESS
STATUS WAS QUESTIONED, AND BY A DECISION OF THE SMALL BUSINESS SIZE
APPEALS BOARD DATED SEPTEMBER 3, 1964, IT WAS DETERMINED TO BE SMALL
BUSINESS FOR THAT PROCUREMENT.
IN BIDDING ON THE SUBJECT PROCUREMENT, CAMPA APPARENTLY CERTIFIED
ITSELF SMALL BUSINESS ON THE STRENGTH OF THE BOARD'S 1964 DETERMINATION.
HOWEVER, THE SECOND LOW BIDDER, SUNNY HILL FARMS DAIRY COMPANY, INC.,
PROTESTED CAMPA'S ELIGIBILITY AS A SMALL BUSINESS CONCERN BECAUSE IT
PROPOSED TO PROCESS THE MILK THROUGH THE FACILITIES OF A LARGE BUSINESS
CONCERN. THE SBA'S LITTLE ROCK REGIONAL OFFICE SUSTAINED ITS
ELIGIBILITY AS SMALL BUSINESS AND SUNNY HILL APPEALED THIS DETERMINATION
TO THE SIZE APPEALS BOARD. ON SEPTEMBER 28, 1965, THE BOARD REVERSED
THE FINDING OF THE REGIONAL OFFICE AND DETERMINED THAT CAMPA WAS NOT A
SMALL BUSINESS CONCERN FOR THE SUBJECT PROCUREMENT. IN A LETTER DATED
OCTOBER 8, 1965, TO THE BOARD, CAMPA APPEALED THE BOARD'S DECISION AND
ALSO ASKED THE BOARD'S RULING, IN THE EVENT THE APPEAL SHOULD BE DENIED,
ON WHAT EFFECT SEVERAL ALTERNATIVE PROPOSED CHANGES IN ITS ORGANIZATION
OR OPERATIONS WOULD HAVE ON ITS SMALL BUSINESS STATUS. SO FAR AS
APPEARS FROM THE PRESENT RECORD, THE BOARD HAS NOT RULED ON EITHER FACET
OF THE APPEAL.
YOU STATE THAT THE SBA IS NOT CERTAIN WHETHER THE RULES ESTABLISHED
BY OUR PAST DECISIONS PERMIT A CONCERN, AFTER BIDS ON A SMALL BUSINESS
SET-ASIDE PROCUREMENT HAVE BEEN OPENED, TO VARY ITS ORGANIZATION OR
METHOD OF DOING BUSINESS FOR THE PURPOSE OF ELIMINATING AN IMPEDIMENT TO
ITS QUALIFYING AS A SMALL BUSINESS CONCERN, AND YOU REQUEST OUR VIEWS AS
FOLLOWS:
"YOUR ADVICE IS REQUESTED ON THE EFFECT OF THE QUOTED ALTERNATIVES
PROPOSED BY COUNSEL FOR CENTRAL ARKANSAS MILK PRODUCERS ASSOCIATION ON
HIS CLIENT'S ELIGIBILITY FOR RECEIPT OF AN AWARD ON IFB 03-65-61,
ASSUMING THAT THE SMALL BUSINESS ADMINISTRATION DETERMINED THAT THE
ADOPTION OF THE PROPOSALS WILL RESULT IN CENTRAL ARKANSAS MILK PRODUCERS
ASSOCIATION BEING A SMALL BUSINESS CONCERN FOR GOVERNMENT PROCUREMENTS
OF MILK AND MILK PRODUCTS.'
YOU CITE SEVERAL DECISIONS OF OUR OFFICE WHICH ARE CONSIDERED
RELEVANT TO THE QUESTION UNDER CONSIDERATION. AS WAS STATED IN ONE OF
THE CITED DECISIONS, 41 COMP. GEN. 47,55,"ORDINARILY * * * THE FINAL
DETERMINATION OF THE ELIGIBILITY OF A BIDDER AS A SMALL BUSINESS CONCERN
UNDER A SMALL-BUSINESS RESTRICTED INVITATION IS MADE AS OF THE DATE OF
AWARD.' HOWEVER, AS WAS POINTED OUT IN THAT DECISION, WE DO NOT BELIEVE
THIS GENERAL RULE IS FOR APPLICATION UNDER CERTAIN CIRCUMSTANCES. THE
ABOVE-CITED DECISION INVOLVED ONE OF THE RECOGNIZED EXCEPTIONS TO THE
GENERAL RULE. INVOLVED WAS A SITUATION WHERE THE LOW BIDDER CERTIFIED
ITSELF AS A SMALL BUSINESS CONCERN ALTHOUGH IT WAS ON NOTICE BY THE SBA
PRIOR TO THE SUBMISSION OF ITS BID THAT ITS SIZE STATUS WAS SUBJECT TO
QUESTION. AFTER THE BIDS WERE OPENED, THE BIDDER TOOK AFFIRMATIVE
ACTION (REALIGNMENT OF ITS STOCK) FOR THE SOLE PURPOSE OF MEETING THE
SMALL BUSINESS SIZE CRITERIA, THEREBY QUALIFYING FOR AWARD. WE HELD
THAT THE AWARD TO THAT BIDDER WAS NOT PROPER BECAUSE THE BIDDER HAD NOT
UTILIZED THE SELF-CERTIFICATION PROCEDURE PRUDENTLY AS REQUIRED BY THE
SMALL BUSINESS ACT AND ALSO BECAUSE THE STOCK REALIGNMENT AFTER BID
OPENING GAVE IT A SECOND CHANGE AND AN UNDUE ADVANTAGE OVER OTHER
BIDDERS.
IN A SITUATION WHERE THE SELF-CERTIFICATION WAS IN GOOD FAITH
ALTHOUGH ERRONEOUS AND THE BIDDER TOOK NO AFFIRMATIVE ACTION AFTER BID
OPENING TO QUALIFY ITSELF AS A SMALL BUSINESS CONCERN, BUT THERE WAS A
CHANGE IN THE BIDDER'S STATUS FROM A LARGE TO SMALL BUSINESS CONCERN BY
REASON OF FACTORS BEYOND ITS CONTROL, WE HELD THAT THE GENERAL RULE WAS
FOR APPLICATION AND UPHELD THE AWARD TO THAT BIDDER. SEE 42 COMP. GEN.
219; B-153267, AUGUST 10, 1964.
IN ANOTHER DECISION CITED BY YOU, B-156882, JULY 28, 1965, WHERE THE
EVIDENCE INDICATED THE SELF-CERTIFICATION WAS IN GOOD FAITH, WE APPROVED
THE AWARD ALTHOUGH THE BIDDER'S CHANGE IN STATUS FROM A LARGE TO A SMALL
BUSINESS CONCERN WAS BROUGHT ABOUT BY THE BIDDER AFTER BID OPENING.
HOWEVER, IT IS SIGNIFICANT TO NOTE THAT ALTHOUGH THE AFFIRMATIVE
ACTION OF THE BIDDER AFTER BID OPENING RESULTED IN ITS QUALIFYING AS A
SMALL BUSINESS CONCERN, SUCH ACTION WAS NOT FOR THE SOLE PURPOSE OF
MEETING THE SMALL BUSINESS SIZE CRITERIA, BUT A BONA FIDE TRANSACTION
NOT RELATED TO ITS SIZE STATUS.
IN THE INSTANT CASE, WE CANNOT CONCLUDE FROM THE RECORD PRESENTED
THAT CAMPA'S SELF-CERTIFICATION AT THE TIME OF BID SUBMISSION WAS IN BAD
FAITH. HOWEVER, IT IS CLEAR THAT ANY OF THE PROPOSED CHANGES IN ITS
ORGANIZATION OR OPERATIONS AT THIS LATE DATE WOULD BE FOR THE SOLE
PURPOSE OF QUALIFYING IT AS A SMALL BUSINESS CONCERN AND MAKING IT
ELIGIBLE FOR AWARD. TO PERMIT CONSIDERATION OF THE CAMPA BID IN THESE
CIRCUMSTANCES WOULD BE TANTAMOUNT TO THE GRANTING OF A SECOND CHANCE TO
BID. SUCH PROCEDURE WOULD BE PREJUDICIAL TO OTHER RESPONSIVE BIDDERS,
WOULD BE DESTRUCTIVE OF THE COMPETITIVE BIDDING PROCESS, AND WOULD
CIRCUMVENT THE SMALL BUSINESS SET-ASIDE PROGRAM.
IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT IT WOULD BE IMPROPER
TO CONSIDER THE ALTERNATIVES PROPOSED BY CAMPA IN DETERMINING ITS
ELIGIBILITY FOR AN AWARD UNDER IFB 03-65-61.
B-157980, NOV. 29, 1965
TO MR. ERNEST W. VOGT, AUTHORIZED CERTIFYING OFFICER, WEATHER BUREAU
REGIONAL OFFICE:
THIS REFERS TO YOUR LETTER OF NOVEMBER 2, 1965, REFERENCE C/A-1.2,
AND PRIOR CORRESPONDENCE, REQUESTING OUR DECISION AS TO THE PROPRIETY OF
CERTIFYING FOR PAYMENT A VOUCHER IN FAVOR OF OREN A. TANKERSLEY AN
EMPLOYEE OF THE WEATHER BUREAU, FOR OVERTIME COMPENSATION FOR DRIVING A
GOVERNMENT-OWNED VEHICLE OUTSIDE OF HIS NORMAL WORKDAY IN THE
CIRCUMSTANCES SET OUT BELOW.
MR. TANKERSLEY, A FIELD AIDE, WAS ASSIGNED A VEHICLE OF THE CARRYALL
TYPE TO CARRY TOOLS, SUPPLIES, TEST EQUIPMENT AND OTHER EQUIPMENT FOR
USE IN REPAIR, MAINTENANCE AND INSTALLATION OF WEATHER BUREAU
INSTRUMENTAL EQUIPMENT. A FIELD AIDE ORDINARILY TRAVELS IN ONE OR TWO
STATES AND SERVICES THREE OR FOUR HUNDRED SUBSTATIONS. BY TRAVEL
AUTHORIZATION NO. KC-65-28, MR. TANKERSLEY WAS AUTHORIZED TO TRAVEL FROM
CHEYENNE, WYOMING, TO POINTS IN WYOMING AND ADJOINING STATES AND RETURN.
THE PURPOSE OF THE TRAVEL WAS TO ESTABLISH, INSPECT, AND MAINTAIN
HYDROCLIMATIC SUBSTATIONS AND TO PERFORM RELATED DUTIES. TRAVEL WAS
AUTHORIZED BY GOVERNMENT-OWNED VEHICLE.
YOU EXPRESS THE VIEW THAT THE RULING THAT COMPENSATION CANNOT BE
CLAIMED FOR DRIVING A GOVERNMENT VEHICLE UNDER THE CIRCUMSTANCES HAS
LONG BEEN REGARDED AS AN INEQUITY BY THOSE CONCERNED AND BY OTHERS
KNOWLEDGEABLE OF THE CIRCUMSTANCES.
OUR OFFICE HAS HELD THAT OVERTIME IS PAYABLE TO PER ANNUM EMPLOYEES
FOR TRAVEL TIME WHERE THE TRAVEL INVOLVES THE ACTUAL PERFORMANCE OF WORK
OR IS CARRIED OUT UNDER ARDUOUS CONDITIONS MAKING THE TRAVEL INSEPARABLE
FROM WORK. SECTION 204 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945,
APPROVED JUNE 30, 1945, AS ADDED BY SECTION 205 (B) OF THE ACT OF
SEPTEMBER 1, 1954, 68 STAT. 1110, 5 U.S.C. 912B, RECOGNIZES THIS
RESTRICTED BASIS OF PAYMENT. THAT RULE MUST BE APPLIED EVEN THOUGH THE
JOB DESCRIPTION OF THE EMPLOYEE INVOLVED REQUIRES THAT HE DRIVE A
GOVERNMENT-OWNED VEHICLE IF THE DRIVING IS MERELY INCIDENT TO THE
PERFORMANCE OF DUTY AT VARIOUS LOCATIONS. SEE B-145587, MAY 17, 1961
(COPY ENCLOSED). IN THE INSTANT CASE IT DOES NOT APPEAR THAT ACTUAL
WORK WAS PERFORMED WHILE TRAVELING OR THAT THE TRAVEL WAS CARRIED OUT
UNDER ARDUOUS CONDITIONS.
THEREFORE, IN THE CIRCUMSTANCES OF THIS CASE, THE VOUCHER WHICH IS
RETURNED WITH RELATED PAPERS, MAY NOT BE CERTIFIED FOR PAYMENT.
B-157485, NOV. 26, 1965
TO BLOCK ENGINEERING, INC. :
REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 16, 1965, PROTESTING
THE AWARD OF A CONTRACT BY THE NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION (NASA) UNDER REQUEST FOR PROPOSAL (RFP) NO.
651-42668-206, DATED APRIL 23, 1965, TO ANY CONCERN OTHER THAN RADIO
CORPORATION OF AMERICA (RCA), FOR WHICH YOUR COMPANY IS A PROPOSED
SUBCONTRACTOR. IT IS THEREIN ALLEGED THAT AN AWARD TO ANY CONTRACTOR
BUT RCA WOULD BE A VIOLATION OF BOTH YOUR PROPRIETARY RIGHTS AND PATENT
POSITION ON
THE INTERFEROMETER SPECTROMETER TO BE PROCURED BY THE ABOVE-MENTIONE
RFP.
THE REQUEST FOR PROPOSAL, CALLING FOR PROPOSALS ON A QUANTITY OF
INFRARED INTERFEROMETER SPECTROMETERS (IRIS), WAS MAILED TO 45
PROSPECTIVE CONTRACTORS ON APRIL 23, 1965.
THE MAIN SPECIFICATION TO WHICH OFFERS WERE TO BE RESPONSIVE IS
SPECIFICATION S-653-P-5, DATED FEBRUARY 24, 1965. THIS IS A PERFORMANCE
SPECIFICATION WHICH DEFINES THE REQUIREMENTS FOR THE DESIGN,
DEVELOPMENT, FABRICATION AND TESTING OF THE INTERFEROMETER SPECTROMETER
TO BE DEVELOPED AND INSTALLED IN THE NIMBUS "B" METEOROLOGICAL
SATELLITE. FURTHER, THE RFP AND SECTION 3 OF SPECIFICATION S-653-P-5
REQUIRED THE CONTRACTOR TO PERFORM A STUDY TO COVER THE BASIC DESIGN OF
THE INSTRUMENT TO BE CONSTRUCTED, THE CONSTRUCTION OF AN ENGINEERING
MODEL TO VERIFY THE PERFORMANCE OF THE DESIGN SELECTED, FOLLOWED BY A
PRE-PROTOTYPE VERSION, A PROTOTYPE MODEL, AND FINALLY THREE FLIGHT
MODELS OF THE DEVELOPED INSTRUMENT. INCLUDED IN THE SPECIFICATION AS A
REFERENCE DOCUMENT IS A GODDARD SPACE FLIGHT CENTER (GSFC) REPORT
(X-650-65-75) PREPARED IN CONJUNCTION WITH THE UNIVERSITY OF MICHIGAN ON
AN IRIS EXPERIMENT WHICH CONTAINS DETAILED INFORMATION CONCERNING THE
INSTRUMENT USED. BY LETTER DATED MAY 8, 1965, YOUR COMPANY ADVISED THE
CONTRACTING OFFICER OF NASA AT GODDARD SPACE FLIGHT CENTER, GREENBELT,
MARYLAND, THAT THE INTERFEROMETER SPECTROMETER CALLED FOR UNDER SUBJECT
RFP IS EMBODIED IN TWO PATENTS BELONGING TO YOUR COMPANY, AND A MEETING
WITH NASA PERSONNEL WAS REQUESTED "IN ORDER TO DISCUSS APPROPRIATE
ACTION TO BE TAKEN, INCLUDING A POSSIBLE SOLE SOURCE PROCUREMENT TO
BLOCK ENGINEERING, INC., ON SUBJECT RFP.' THE CONTRACTING OFFICER
INFORMED YOU BY LETTER OF JUNE 1, 1965, THAT IN LIGHT OF THE RFP
REQUIREMENTS NO NEED FOR A MEETING COULD BE SEEN, SINCE "IT IS PREMATURE
AT THIS TIME TO CONSIDER WHETHER YOUR PATENTS MIGHT BE INFRINGED," AND
THAT "A SINGLE SOURCE PROCUREMENT TO YOUR
COMPANY COULD NOT BE CONSIDERED AS REQUESTED SINCE A PATENT POSITION
IN ITSELF, IS INSUFFICIENT JUSTIFICATION.'
PROPOSALS ON SUBJECT RFP WERE TO BE SUBMITTED BY MAY 21, 1965, AND
WERE SO SUBMITTED BY SIX PROSPECTIVE CONTRACTORS. BASED ON SCORES
ESTABLISHED BY A SOURCE EVALUATION BOARD, THREE OF THE SIX PROPOSALS
RECEIVED WERE ELIMINATED FROM CONSIDERATION FOR THE AWARD OF THE
CONTRACT BY A TECHNICAL ADVISORY COMMITTEE OF NASA. THE THREE REMAINING
PROSPECTIVE CONTRACTOR'S PROPOSALS AFTER ORAL DISCUSSIONS WERE RATED AS
FOLLOWS:
TABLE
ON THE BASIS OF TECHNICAL ACCEPTABILITY ON THE BASIS OF PRICE
NO. 1 PERKIN-ELMER NO. 1 TEXAS INSTRUMENTS
NO. 2 TEXAS INSTRUMENTS NO. 2 PERKIN-ELMER
NO. 3 RCA NO. 3 RCA
AFTER REVIEWING THE EVALUATION AND THE RELATIVE DIFFERENCE BETWEEN
PRICE AND TECHNICAL ACCEPTABILITY IT WAS DECIDED THAT TEXAS INSTRUMENTS
OFFERED THE GOVERNMENT THE OPTIMUM COMBINATION OF TECHNICAL
ACCEPTABILITY AND PRICE. RADIO CORPORATION OF AMERICA WAS NOTIFIED BY
LETTER DATED AUGUST 12, 1965, OF ITS ELIMINATION FROM CONSIDERATION OF
THE AWARD AND THE SELECTION OF TEXAS INSTRUMENTS FOR NEGOTIATIONS.
AWARD OF THE CONTRACT WAS MADE TO TEXAS INSTRUMENTS ON SEPTEMBER 14,
1965, PRIOR TO RESOLUTION OF YOUR PROTEST OF AUGUST 16, 1965, IN
ACCORDANCE WITH PARAGRAPH 2.407-9 (B) (2) OF THE NASA PROCUREMENT
REGULATION BASED UPON THE WRITTEN DETERMINATION OF THE CONTRACTING
OFFICER THAT THE PROCUREMENT WAS URGENTLY REQUIRED; THAT DELIVERY OF
THE IRIS INSTRUMENTS WOULD BE UNDULY DELAYED BY FAILURE TO MAKE AWARD
PROMPTLY; AND THAT A PROMPT AWARD WOULD BE IN THE BEST INTEREST OF AND
OTHERWISE ADVANTAGEOUS TO THE GOVERNMENT. IT IS ADMINISTRATIVELY
REPORTED THAT ANY SLIPPAGE IN THE DELIVERY SCHEDULE COULD EITHER SET THE
IRIS PROGRAM BACK TWO YEARS OR DELAY LAUNCHING OF THE NIMBUS B SATELLITE
AT INCREASED COSTS OF ONE MILLION DOLLARS A MONTH.
PRIOR TO THE SUBMISSION OF YOUR PROPOSAL ON THE IRIS PROCUREMENT
BLOCK SOLD A MODEL 14 INTERFEROMETER SPECTROMETER TO THE UNIVERSITY OF
MICHIGAN FOR USE BY THE UNIVERSITY IN PERFORMING A VARIETY OF TASKS
RELATING TO SATELLITE METEOROLOGY UNDER NASA CONTRACT NASR-54 (03).
ACCORDING TO PERSONNEL AT THE UNIVERSITY OF MICHIGAN THIS BLOCK
INTERFEROMETER WAS SUBJECT TO TESTING, MODIFICATION AND CALIBRATION, AND
RESULTED IN MANY INTERCHANGES OF INFORMATION BETWEEN UNIVERSITY AND
BLOCK PERSONNEL DURING THE PERIOD JULY 1961 TO JUNE 1963. IN EARLY 1964
A JOINT EFFORT BY THE MEMBERS OF THE GODDARD SPACE FLIGHT CENTER AND THE
UNIVERSITY OF MICHIGAN RESULTED IN WHAT IS REPORTED TO BE THE
DEVELOPMENT OF A NEW INTERFEROMETER SPECTROMETER OF GREATER SENSITIVITY,
FINER PRECISION, GREATER ACCURACY AND OF FINER FREQUENCY RESOLUTION THAN
THE BLOCK 14 INSTRUMENT. THIS NEW INTERFEROMETER SPECTROMETER IS THE
INSTRUMENT REFERRED TO IN GSFC REPORT X-650-65-75 WHICH WAS SENT WITH
THE RFP PACKAGE. IN COMMENTING ON THE POSSIBLE INCORPORATION OF
PROPRIETARY DATA BELONGING TO BLOCK INTO GSFC REPORT X-650-65-75, ONE OF
THE AUTHORS OF THE REPORT, L. W. CHANEY OF THE UNIVERSITY OF MICHIGAN,
STATED IN HIS LETTER TO YOUR COMPANY PRESIDENT (SEPTEMBER 3, 1965),
THAT:
"ONE, I HAVE NEVER HELD ANY CONFIDENTIAL CONVERSATIONS, NOR EXCHANGED
ANY CONFIDENTIAL INFORMATION OF ANY KIND WITH EITHER YOU OR ANY MEMBERS
OF YOUR STAFF. SECOND, THE IMPLICATION THAT I WOULD USE YOUR
INFORMATION WITHOUT YOUR CONSENT IS COMPLETELY FALSE. ALL THE
INFORMATION CONTAINED IN THE CITED REPORT EITHER ORIGINATED AT GSFC, THE
UNIVERSITY OF MICHIGAN, OR WAS OBTAINED FROM THE OPEN LITERATURE.'
IT IS ALSO NOTED THAT THE RECORD CONTAINS NO ALLEGATION BY YOUR
COMPANY THAT ANY PROPRIETARY DATA WAS SUBMITTED IN CONFIDENCE DIRECTLY
TO NASA REGARDING YOUR INTERFEROMETER SPECTROMETER. IN OUR DECISION
B-154079, OCTOBER 14, 1964, WE POINTED OUT THAT THE STARTING POINT IN
DISCUSSING A CONFLICT INVOLVING THE USE OF TRADE SECRETS DISCLOSED IN
CONFIDENCE, IS THE CONFIDENTIAL RELATIONSHIP BETWEEN THE PARTIES. THE
EXISTENCE OF AN EXPRESS NONDISCLOSURE AGREEMENT NEED NOT BE SHOWN BUT
SUCH AN AGREEMENT MAY BE IMPLIED FROM THE CIRCUMSTANCES SURROUNDING THE
DEALINGS. AS INDICATED ABOVE THE RECORD OF THIS CASE DOES NOT ESTABLISH
THE EXISTENCE OF A CONFIDENTIAL RELATIONSHIP BETWEEN YOUR COMPANY AND
THE UNIVERSITY OF MICHIGAN. ASSUMING, WITHOUT DECIDING, FOR THE PURPOSE
OF DISCUSSION THAT SUCH A RELATIONSHIP DID EXIST THERE IS STILL THE
COROLLARY QUESTION AS TO WHETHER THE GOVERNMENT IS BOUND IN ANY WAY BY
SUCH A CONFIDENTIAL RELATIONSHIP.
THE RESTATEMENT OF THE LAW-TORTS (1939) IN SECTION 758 READS IN PART
AS FOLLOWS:
"ONE WHO LEARNS ANOTHER'S TRADE SECRET FROM A THIRD PERSON WITHOUT
NOTICE THAT IT IS SECRET AND THAT THE THIRD PERSON'S DISCLOSURE IS A
BREACH OF HIS DUTY TO THE OTHER, OR WHO LEARNS THE SECRET THROUGH A
MISTAKE WITHOUT NOTICE OF THE SECRECY AND THE MISTAKE,
(A) IS NOT LIABLE TO THE OTHER FOR A DISCLOSURE OR USE OF THE SECRET
PRIOR TO RECEIPT OF SUCH NOTICE, AND
(B) IS LIABLE TO THE OTHER FOR A DISCLOSURE OR USE OF THE SECRET
AFTER THE RECEIPT OF SUCH NOTICE, UNLESS PRIOR THERETO HE HAS IN GOOD
FAITH PAID VALUE FOR THE SECRET OR HAS SO CHANGED HIS POSITION THAT TO
SUBJECT HIM TO LIABILITY WOULD BE INEQUITABLE.'
(SEE ALSO TRADE SECRETS BY ELLIS, SECTION 56, AND CHADWICK V.
COVELL, 151 MASS. 190, 23 N.E. 1068 (1890).)
THE RECORD INDICATES THAT THE FIRST TIME NASA HAD NOTICE OF YOUR
ALLEGED PROPRIETARY RIGHTS IN SPECIFICATION S-653-P-5 WAS WHEN YOUR
PROTEST WAS RECEIVED ON AUGUST 16, 1965. THIS WAS AFTER NASA HAD IN
GOOD FAITH PAID VALUE FOR THE INFORMATION RECEIVED BY WAY OF ITS
CONTRACT WITH THE UNIVERSITY OF MICHIGAN.
BASED ON THE ABOVE-CITED RULE FROM THE RESTATEMENT OF THE LAW AND THE
FACTS AS SHOWN BY THE RECORD THERE APPEARS TO BE NO LEGAL BAR TO PREVENT
NASA FROM USING WHATEVER INFORMATION IT HAS OBTAINED BY VIRTUE OF ITS
CONTRACT WITH THE UNIVERSITY OF MICHIGAN.
A REVIEW OF THE PROVISIONS OF RFP NO. 651-42668-206 INDICATES THAT
THE GENERAL PROVISIONS OF THE CONTRACT INCLUDE, AS ARTICLE 22, THE
AUTHORIZATION AND CONSENT (SEPTEMBER 1962) CLAUSE, WHICH IN SUBSTANCE
GIVES THE GOVERNMENT'S AUTHORIZATION AND CONSENT TO THE CONTRACTOR TO
USE AND TO MANUFACTURE ANY INVENTION DESCRIBED IN AND COVERED BY A
PATENT OF THE UNITED STATES IN THE PERFORMANCE OF THE CONTRACT. THIS
ARTICLE SHOULD BE READ IN CONJUNCTION WITH TITLE 28, UNITED STATES CODE,
SECTION 1498, WHICH PROVIDES IN PART AS FOLLOWS:
"/A) WHENEVER AN INVENTION DESCRIBED IN AND COVERED BY A PATENT OF
THE UNITED STATES IS USED OR MANUFACTURED BY OR FOR THE UNITED STATES
WITHOUT LICENSE OF THE OWNER THEREOF OR LAWFUL RIGHT TO USE OR
MANUFACTURE THE SAME, THE OWNER'S REMEDY SHALL BE BY ACTION AGAINST THE
UNITED STATES IN THE COURT OF CLAIMS * * *.
"FOR THE PURPOSES OF THIS SECTION, THE USE OR MANUFACTURE OF AN
INVENTION DESCRIBED IN AND COVERED BY A PATENT OF THE UNITED STATES BY A
CONTRACTOR, A SUB-CONTRACTOR, OR ANY PERSON, FIRM OR CORPORATION FOR THE
GOVERNMENT AND WITH THE AUTHORIZATION OR CONSENT OF THE GOVERNMENT,
SHALL BE CONSTRUED AS USE OR MANUFACTURE FOR THE UNITED STATES.'
IN OUR DECISION, OF OCTOBER 6, 1958, TO THE SECRETARY OF THE AIR
FORCE, 38 COMP. GEN. 276, WE EXPRESSED THE VIEW THAT SECTION 1498
APPEARS CLEARLY TO CONSTITUTE A MODIFICATION OF THE PATENT LAW BY
LIMITING THE RIGHTS OF PATENTEES INSOFAR AS PROCUREMENT OF SUPPLIES BY
THE GOVERNMENT MAY BE CONCERNED, AND BY VESTING IN THE GOVERNMENT A
RIGHT TO THE USE OF ANY PATENTS GRANTED BY IT UPON PAYMENT OF REASONABLE
COMPENSATION FOR SUCH USE. WE THEREFORE HELD THAT IT WOULD BE IMPROPER
TO REJECT A LOW BID MERELY BECAUSE THE BIDDER WAS NOT LICENSED TO
MANUFACTURE A PATENTED ARTICLE. WE HAVE CONTINUED TO ADHERE TO THIS
POSITION AND HAVE HELD THAT, EVEN UNDER NEGOTIATED PROCEDURES SUCH AS
INVOLVED HERE, A LOW OFFER SHOULD NOT BE REJECTED SOLELY BECAUSE OF
POSSIBLE PATENT INFRINGEMENT. SEE FOR EXAMPLE 39 COMP. GEN. 760, AND
B-148135, APRIL 30, 1962.
THE RECORD OF THIS CASE INDICATE THAT BY LETTER OF MAY 8, 1965, YOUR
COMPANY FIRST ADVISED THE CONTRACTING OFFICER OF A POSSIBLE PATENT
INFRINGEMENT. THE CONTRACTING OFFICER'S REPLY OF JUNE 1, 1965, DENIED
YOUR REQUEST PARTIALLY ON THE BASIS THAT IT WAS TOO PREMATURE TO
CONSIDER THE QUESTION OF PATENT INFRINGEMENT DUE TO THE NATURE OF THE
WORK TO BE PERFORMED. ON THE BASIS OF OUR PRIOR DECISIONS, HOWEVER,
EVEN IF YOUR COMPANY'S POSITION AS TO THE ALLEGED PROTEST INFRINGEMENT
IS CORRECT THIS WOULD NOT PREVENT THE AWARD OF THE CONTRACT.
FOR THE REASONS STATED, WE SEE NO PROPER BASIS UPON WHICH TO QUESTION
THE VALIDITY OF THE CONTRACT AWARDED TO TEXAS INSTRUMENTS AND YOUR
PROTEST MUST THEREFORE BE DENIED.
B-157584, NOV. 26, 1965
TO THE HONORABLE LELAND J. HAWORTH, DIRECTOR, NATIONAL SCIENCE
FOUNDATION:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 26, 1965, REQUESTING A
DECISION WHETHER THE NATIONAL SCIENCE FOUNDATION (NSF) MAY DEVELOP
PREDETERMINED RATES FOR INDIRECT COSTS FOR USE IN MAKING GRANTS TO
NONPROFIT INSTITUTIONS OTHER THAN EDUCATIONAL INSTITUTIONS.
IN 35 COMP. GEN. 434 OUR OFFICE HELD THAT THE USE OF FIXED OVERHEAD
RATES ESTABLISHED IN ADVANCE AND APPLIED TO SOME ELEMENT OF DIRECT COST
UNDER COST-REIMBURSABLE-TYPE CONTRACTS WAS CONTRARY TO LEGISLATION
PROHIBITING A COST-PLUS-A-PERCENTAGE-OF-COST SYSTEM OF CONTRACTING. TO
OVERCOME THAT DECISION, PUBLIC LAW 87-638, 76 STAT. 437, WAS ENACTED.
THAT LEGISLATION PROVIDED:
"THAT HEREAFTER PROVISION MAY BE MADE IN COST-TYPE RESEARCH AND
DEVELOPMENT CONTRACTS (INCLUDING GRANTS) WITH UNIVERSITIES, COLLEGES, OR
OTHER EDUCATIONAL INSTITUTIONS FOR PAYMENT OF REIMBURSABLE INDIRECT
COSTS ON THE BASIS OF PREDETERMINED FIXED-PERCENTAGE RATES APPLIED TO
THE TOTAL, OR AN ELEMENT THEREOF, OF THE REIMBURSABLE DIRECT COSTS
INCURRED.'
IN LINE WITH THAT LEGISLATION BUREAU OF THE BUDGET (BOB) CIRCULAR NO.
A-21 (REVISED) DATED MARCH 3, 1965, PROVIDES:
"* * * THE STATED OBJECTIVES OF THE LAW ARE TO SIMPLIFY THE
ADMINISTRATION OF COST-TYPE RESEARCH AND DEVELOPMENT CONTRACTS WITH
EDUCATIONAL INSTITUTIONS, TO FACILITATE THE PREPARATION OF THEIR
BUDGETS, AND TO PERMIT MORE EXPEDITIOUS CLOSEOUT OF SUCH CONTRACTS WHEN
THE WORK IS COMPLETED. IN VIEW OF THE POTENTIAL ADVANTAGES OFFERED BY
THIS PROCEDURE, CONSIDERATION SHOULD BE GIVEN TO THE NEGOTIATION OF
PREDETERMINED FIXED RATES FOR INDIRECT COSTS IN THOSE SITUATIONS WHERE
THE COST EXPERIENCE AND OTHER PERTINENT FACTS AVAILABLE ARE DEEMED
SUFFICIENT TO ENABLE THE CONTRACTING PARTIES TO REACH AN INFORMED
JUDGMENT AS TO THE PROBABLE LEVEL OF INDIRECT COSTS DURING THE ENSUING
ACCOUNTING PERIOD.'
YOU STATE THAT IN ACCORDANCE WITH THE BOB CIRCULAR THE FOUNDATION IS
DEVELOPING INDIRECT COST RATES WHICH WILL BE USED AS PREDETERMINED FIXED
RATES FOR GRANTS TO COLLEGES AND UNIVERSITIES. MOREOVER, YOU INDICATE
THAT IT IS THE DESIRE OF THE FOUNDATION TO DEVELOP PREDETERMINED RATES
FOR USE IN MAKING GRANTS TO NONPROFIT INSTITUTIONS AS WELL AND YOU
INQUIRE WHETHER THE CONCEPT OF PREDETERMINED INDIRECT COST RATES MAY BE
APPLIED TO SUCH INSTITUTIONS. IN CONSIDERING THE QUESTION, YOU SAY THAT
SEVERAL FACTS ARE TO BE RECOGNIZED:
"* * * FIRST, THE FOUNDATION SUPPORTS BASIC RESEARCH THROUGH GRANTS
TO COLLEGES, UNIVERSITIES, AND OTHER NON-PROFIT INSTITUTIONS. SECOND,
THE FOUNDATION PROVIDES SUPPORT IN RESPONSE TO PROPOSALS INITIATED
INDEPENDENTLY BY INDIVIDUAL SCIENTISTS THROUGH THEIR INSTITUTIONS.
THIRD, THE FOUNDATION CONTROLS THE AMOUNT OF FUNDS MADE AVAILABLE. EACH
GRANT IS FOR A FIXED AMOUNT AND THE FOUNDATION HAS NO RESPONSIBILITY FOR
MAKING ADDITIONAL FUNDS AVAILABLE REGARDLESS OF WHAT THE DIRECT COST MAY
BE. FOURTH, IN ALL CASES, THE INSTITUTIONS MUST SHARE SOME PART OF THE
COST OF THE PROJECT. THIS IS TO BE DISTINGUISHED FROM DEVELOPMENTAL
WORK WHERE THE TOTAL COST IS BORNE BY THE GOVERNMENT SINCE SUCH WORK IS
UNDERTAKEN BY THE INSTITUTION AT THE REQUEST OF THE GOVERNMENT IN ORDER
TO FULFILL A SPECIFIC GOVERNMENT NEED. IN VIEW OF THESE FACTS, IT IS
THE NATIONAL SCIENCE FOUNDATION POSITION THAT BASIC RESEARCH GRANTS WITH
PREDETERMINED FIXED OVERHEAD RATES WILL NOT CREATE SITUATIONS EQUIVALENT
TO COST-PLUS-PERCENTAGE-OF-COST CONTRACTS AND WILL NOT BE CONTRARY TO 10
USC 2306 (A) WHICH WAS THE SUBJECT OF A DECISION OF THE COMPTROLLER
GENERAL, DATED JANUARY 27, 1956 (35 COMP. GEN. 434).'
OUR DECISION CITED ABOVE RULED ONLY THAT CONTRACTS ENTERED INTO ON A
COST-PLUS-A-PERCENTAGE-OF-COST BASIS WERE ILLEGAL. WITH RESPECT TO
GRANTS WE HAVE TAKEN THE POSITION THAT THE USE OF PREDETERMINED FIXED
OVERHEAD RATES SHOULD BE DISCOURAGED IN PROGRAMS WHERE DICTIONARY
ADMINISTRATIVE AUTHORITY IS SO BROAD AS TO PERMIT GRANTS OR GIFTS AS IN
THE GRANT PROGRAM CONDUCTED BY NSF. SEE B-117219, MAY 15, 1956. WE
HAVE NOT RULED THAT SUCH SYSTEM OF PAYMENT FOR OVERHEAD IN GRANTS IS
ILLEGAL.
THEREFORE, WHILE IT HAS BEEN OUR OPINION THAT, GENERALLY, INDIRECT
COSTS PAID FOR BY THE GOVERNMENT SHOULD BE ACTUAL ALLOWABLE COSTS
DETERMINED BY AFTER-THE-FACT AUDIT, WE RECOGNIZE THE DESIRABILITY OF
EASING THE ADMINISTRATIVE BURDEN THAT WOULD BE IMPOSED UPON NSF IF IT
COULD NOT APPLY THE PREDETERMINED FIXED INDIRECT COST RATES TO THE
NONACADEMIC INSTITUTIONS AS IN THE CASE OF THE EDUCATIONAL INSTITUTIONS.
WE BELIEVE THAT THE PROCEDURES PROPOSED BY NSF, IF EFFECTIVELY
IMPLEMENTED, COULD SERVE TO MINIMIZE POSSIBLE ABUSES. IT IS OUR
UNDERSTANDING, HOWEVER, THAT THE PROPOSED PROCEDURES WILL BE USED ONLY
FOR BASIC RESEARCH PROJECT GRANTS WHICH ARE FIXED IN AMOUNT WITH NSF
HAVING NO RESPONSIBILITY TO MAKE ADDITIONAL FUNDS AVAILABLE REGARDLESS
OF WHAT THE TOTAL COST MAY BE AND THAT THE GRANTEES WILL BE REQUIRED TO
SHARE SOME PORTION OF THE COST OF EACH RESEARCH PROJECT IN ACCORDANCE
WITH GUIDELINES TO BE ESTABLISHED BY THE BUREAU OF THE BUDGET.
ACCORDINGLY, IF THE USE OF PREDETERMINED OVERHEAD RATES IN
COST-SHARING GRANTS TO NONPROFIT, NONEDUCATIONAL ORGANIZATIONS IS
DETERMINED BY YOU TO BE IN THE BEST INTEREST OF THE GOVERNMENT, THE USE
OF SUCH PROCEDURES WOULD SEEM APPROPRIATE, AT LEAST ON A TRIAL BASIS,
AND WILL NOT BE OBJECTED TO BY THIS OFFICE UNLESS SUBSEQUENTLY FOUND BY
US TO BE DISADVANTAGEOUS TO THE GOVERNMENT.
B-157792, NOV. 26, 1965
TO MR. RICHARD R. SELBY:
YOUR LETTER OF SEPTEMBER 24, 1965, ACKNOWLEDGES RECEIPT OF OUR
SETTLEMENT OF SEPTEMBER 13, 1965, IN THE AMOUNT OF $831.42 AND ALSO
MAKES RECLAIM OF THE SUM OF $94.06, DISALLOWED BY THAT SETTLEMENT WHICH
AMOUNT YOU SAY REPRESENTS AIR TICKETS PURCHASED BY YOU FOR THE
TRANSPORTATION OF YOU AND YOUR FAMILY FROM GENEVA, SWITZERLAND, TO NICE,
FRANCE, AND MILEAGE FOR A RENTED CAR FROM NICE TO CANNES, FRANCE.
UPON FURTHER RECONSIDERATION OF THIS MATTER WE FIND THAT THE RECORD
SHOWS YOU SUBMITTED VOUCHERS FOR THE FOLLOWING AMOUNTS:
CHART ORIGINAL AMOUNT CLAIMED $2,715.90 VOUCHER
3.94 AIR TRANSPORTATION FROM GENEVA, SWITZERLAND, TO CANN
91.54 MILEAGE, RENTED CAR, NICE TO CANNES, FRANCE
-------------- TOTAL CLAIMED
$2,813.90
THE RECORD FURTHER SHOWS THE FOLLOWING AMOUNTS PAID TO YOU OR ON YOUR
ACCOUNT BY THE OVERNMENT:
CHART AMOUNTS PAID OR CREDITED ON ORIGINAL VOUCHER (1) COLLECTION OF
ADVANCE OF
FUNDS $ 912.00 (2) COLLECTION OF
ROUNDTRIP TRAVEL FROM WOOSTER,
OHIO, TO WASHINGTON, D.C.,
AND RETURN FOR GOVERNMENT
TRANSPORTATION REQUEST USED BY
YOU AND PAID BY THE
GOVERNMENT TO WHICH YOU WERE
NOT ENTITLED 120.73 (3) CHECK ISSUED I
997.70 (4) AMOUNT ALLOWED BY OUR
SETTLEMENT OF SEPTEMBER
13, 1965 831.42
------------------ TOTAL AMOUNT PAID OR CREDITED
$2,861.85
------------ AMOUNT OVERPAID AND DUE
UNITED STATES
IN VIEW OF THE FOREGOING IT IS APPARENT THAT THE $94.06 HAS BEEN
PREVIOUSLY INCLUDED IN THE AMOUNT ALLOWED PLUS AN ADDITIONAL SUM OF
$47.95 TO WHICH YOU WERE NOT ENTITLED. PLEASE REMIT THAT SUM TO OUR
CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, 441 G STREET, N.W.,
WASHINGTON, D.C. 20548, PROMPTLY SO THAT THE MATTER MAY BE CLOSED.
B-143675, NOV. 25, 1965
TO NORTH AMERICAN VAN LINES, INC. :
FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JULY 29 AND AUGUST 3,
1960, REQUESTING REVIEW OF OUR SETTLEMENT CERTIFICATES DATED JULY 20,
1960 (OUR CLAIM NO. TK-687647), AND JULY 25, 1960 (OUR CLAIM NO.
TK-687112), WHICH DISALLOWED YOUR CLAIMS ON BILL NO. H-4115, FOR
$443.30, AND ON BILL NO. H-4122, FOR $347.20. THE AMOUNTS CLAIMED ARE
THE ADDITIONAL TRANSPORTATION CHARGES ALLEGEDLY DUE FOR THE OCEAN PART
OF THE TRANSPORTATION OF TWO SHIPMENTS OF HOUSEHOLD GOODS, MOVING DURING
JUNE 1959 UNDER GOVERNMENT BILLS OF LADING NOS. AF-157671 AND AF-157677,
FROM LAKENHEATH, SUFFOLK, ENGLAND, TO BARKSDALE AIR FORCE BASE,
LOUISIANA, AND BLYTHEVILLE AIR FORCE BASE, ARKANSAS.
YOUR CLAIMS WILL BE RE-EXAMINED AND THE CHARGES WILL BE COMPUTED ON
THE BASIS THAT COMMERCIAL TRANSPORTATION RATHER THAN THE MILITARY SEA
TRANSPORTATION SERVICE WAS USED FOR THE OCEAN PORTION (SOUTHAMPTON,
ENGLAND, TO NEW ORLEANS, LOUISIANA) OF THESE MOVEMENTS. NOTICES OF THE
REVISED SETTLEMENTS SHOULD REACH YOU IN DUE COURSE.
B-133044, NOV. 24, 1965
TO THE HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS
ADMINISTRATION:
BY LETTER DATED NOVEMBER 2, 1965, YOU REQUESTED OUR DECISION AS TO
WHETHER THE VETERANS ADMINISTRATION MAY PROCURE COMMERCIAL LAUNDRY
SERVICES FROM AN EDUCATIONAL INSTITUTION THROUGH NEGOTIATION, RATHER
THAN BY FORMAL ADVERTISING, PROCEDURES.
THE CIRCUMSTANCES INVOLVED IN YOUR REQUEST ARE AS STATED AS FOLLOWS:
"IN CONNECTION WITH THE PLANNING OF A PROPOSED HOSPITAL, A SURVEY OF
POSSIBLE SOURCES OF LAUNDRY SERVICE WAS CONDUCTED REVEALING THAT NO
COMMERCIAL SOURCE COULD PROVIDE SERVICE AT A PRICE WHICH WAS CONSIDERED
REASONABLE. AN ADJACENT UNIVERSITY MEDICAL SCHOOL HAS INDICATED THAT IF
THE VETERANS ADMINISTRATION DESIRES TO PROCURE LAUNDRY SERVICES FROM THE
UNIVERSITY THEIR PROJECTED LAUNDRY FACILITY COULD BE EXPANDED TO PROVIDE
SUFFICIENT CAPACITY AND IT IS ESTIMATED THAT THE COST OF LAUNDRY SERVICE
PROCURED FROM THE UNIVERSITY WOULD BE SUBSTANTIALLY LESS THAN SUCH
SERVICE COULD BE PROCURED FROM COMMERCIAL SOURCES.'
YOU MAKE REFERENCE TO 41 U.S.C. 252 (C) (5) WHICH AUTHORIZES THE
NEGOTIATION OF CONTRACTS FOR SERVICES WITHOUT FORMAL ADVERTISING IF "FOR
ANY SERVICE TO BE RENDERED BY ANY UNIVERSITY, COLLEGE OR OTHER
EDUCATIONAL INSTITUTION," AND OBSERVE THAT LITERALLY READ, BOTH THE
STATUTE AND ITS IMPLEMENTING REGULATION AT FEDERAL PROCUREMENT
REGULATIONS (FPR) 1-3.205 WOULD PERMIT THE NEGOTIATION OF CONTRACTS FOR
ANY SERVICE TO BE RENDERED BY AN EDUCATIONAL INSTITUTION, INCLUDING
COMMERCIAL SERVICES, AS WELL AS EDUCATIONAL, TRAINING AND RESEARCH
SERVICES. IN THIS CONNECTION, YOU ADVISE THAT THE ADMINISTRATION IS NOT
UNMINDFUL OF THE LEGISLATIVE HISTORY OF THE FEDERAL PROPERTY AND
ADMINISTRATIVE SERVICE ACT OF 1949 NOR OF THE EXAMPLES FOR APPLICATION
OF THIS NEGOTIATION AUTHORITY SET OUT IN FPR 1-3.205 (A) WHICH, TO SOME
EXTENT, LEND WEIGHT TO A CONCLUSION THAT SUCH AUTHORITY IS LIMITED TO
THE NEGOTIATION OF CONTRACTS FOR TRAINING, EDUCATIONAL, AND RESEARCH
SERVICES, AND THAT IT DOES NOT EXTEND TO COMMERCIAL SERVICES THAT MIGHT
BE PROVIDED BY EDUCATIONAL INSTITUTIONS.
WE ARE INCLINED TO THE VIEW THAT 41 U.S.C. 252 (C) (5) DOES NOT
PROVIDE AUTHORITY FOR NEGOTIATION OF A LAUNDRY SERVICE CONTRACT WITH A
MEDICAL SCHOOL WHICH IS ADJACENT TO THE PROPOSED HOSPITAL. IN ADDITION
TO S.REPT.NO. 475, 81ST CONGRESS, 1ST SESSION, CITED BY YOU, THE
COGNIZABLE SENATE COMMITTEE, IN REPORTING ON THE PROPOSED FEDERAL
PROPERTY AND ADMINISTRATIVE SERVICES ACT, STATED ON PAGE 19 OF S.REPT.
NO. 338, 81ST CONGRESS, 1ST SESSION, THAT:
"THIS PARAGRAPH (NO. 5) WOULD PERMIT NEGOTIATION OF CONTRACTS FOR
TECHNICAL ASSISTANCE, EXPERT STUDY AND THE APPLICATION OF SPECIALIZED
KNOWLEDGE TO BE PERFORMED BY ANY UNIVERSITY, COLLEGE, OR OTHER
EDUCATIONAL INSTITUTION. THIS WOULD COVER MATTERS WHICH MIGHT NOT
CLEARLY QUALIFY AS EXPERIMENTAL, DEVELOPMENTAL, OR RESEARCH WORK UNDER
PARAGRAPH (10) OF THIS SECTION (NOW PARAGRAPH 11).'
THIS STATEMENT WAS REPEATED ON PAGE 70 OF THE 1959 COMPILATION AND
ANALYSIS OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT
PREPARED BY THE GENERAL SERVICES ADMINISTRATION FOR USE OF THE SENATE
COMMITTEE ON GOVERNMENT OPERATIONS.
WE, THEREFORE, ARE OF THE VIEW THAT THE PHRASE "ANY SERVICE" AS USED
IN THE STATUTE AND REGULATIONS HAS REFERENCE ONLY TO THOSE SPECIALIZED,
NONCOMMERCIAL SERVICES DELINEATED ABOVE WHICH ARE CUSTOMARILY PERFORMED
BY EDUCATIONAL INSTITUTIONS. FOR THESE REASONS, WE MUST CONCLUDE THAT
THE NEGOTIATION AUTHORITY OF 41 U.S.C. 252 (C) (5) IS NOT APPLICABLE TO
THE CONTEMPLATED PROCUREMENT.
B-155197, NOV. 24, 1965
TO THE SECRETARY OF THE TREASURY:
BY LETTER OF OCTOBER 21, 1965, FILE REFERENCE 300.0, THE DIRECTOR,
UNITED STATES SECRET SERVICE, TREASURY DEPARTMENT, REQUESTED OUR
DECISION WHETHER APPROPRIATED FUNDS MAY BE USED TO PAY THE CLAIMS OF
MEMBERS OF THE U.S. SECRET SERVICE, TREASURY GUARD FORCE, FOR
RETROACTIVE OVERTIME COMPENSATION BASED ON THE FACT THAT THE CLAIMANTS
WERE REQUIRED TO REPORT BEFORE THE TIME SCHEDULED FOR THE BEGINNING OF
THEIR SHIFTS.
BY THAT LETTER AND BY HIS SUPPLEMENTARY LETTER OF NOVEMBER 19 THE
DIRECTOR INFORMED US THAT DURING THE PERIOD COVERED BY THEIR CLAIMS
MEMBERS OF THE TREASURY GUARD FORCE WERE REQUIRED TO REPORT FOR WORK 15
MINUTES EARLY. SUCH EARLY REPORTING WAS REQUIRED BECAUSE GUARD FORCE
MEMBERS WERE NOT PERMITTED TO WEAR THEIR UNIFORMS OR CARRY THEIR WEAPONS
OUTSIDE THE TREASURY BUILDINGS. DURING THE 15-MINUTE PERIOD IN QUESTION
GUARDS CHANGED INTO THEIR UNIFORMS, DREW THEIR WEAPONS, ATTENDED ROLL
CALL AND REPORTED TO THEIR PLACES OF DUTY. THE DIRECTOR ALSO ADVISED US
THAT MEMBERS OF THE GUARD FORCE WERE NORMALLY RELIEVED FOR A LUNCH BREAK
OF FROM 15 TO 30 MINUTES BUT THAT THEY WERE REQUIRED TO REMAIN IN THE
"SQUAD ROOM" DURING SUCH BREAKS AND WERE NOT PERMITTED TO LEAVE THE
TREASURY BUILDINGS EXCEPT IN EXTRAORDINARY CIRCUMSTANCES. THIS WAS FOR
THE PURPOSE OF BEING IMMEDIATELY AVAILABLE FOR CALL IN CASE OF AN
EMERGENCY WHICH MIGHT ARISE BECAUSE OF LARGE AMOUNTS OF CASH AND
NEGOTIABLE SECURITIES IN THE TREASURY BUILDINGS. WE ALSO NOTE THAT
AFTER BEING RELIEVED FROM DUTY AT THE END OF THEIR SHIFTS GUARDS WERE
REQUIRED TO TURN IN THEIR WEAPONS AND CHANGE OUT OF THEIR UNIFORMS
BEFORE THEY WERE FREE TO LEAVE.
ON THE BASIS OF THE FACTS PRESENTED IT APPEARS THAT MEMBERS OF THE
TREASURY GUARD FORCE WERE REQUIRED TO WORK APPROXIMATELY 15 MINUTES PER
DAY IN ADDITION TO THEIR ASSIGNED 8-HOUR TOURS OF DUTY. ACCORDINGLY,
THEY ARE ENTITLED TO RETROACTIVE PAYMENT OF 15 MINUTES OVERTIME
COMPENSATION FOR EACH DAY THEY WERE REQUIRED TO REPORT EARLY WITHOUT
ADDITIONAL COMPENSATION PROVIDED PAYMENT IS NOT BARRED BY THE ACT OF
OCTOBER 9, 1940, 54 STAT. 1061, 31 U.S.C. 71A, ALBRIGHT V. UNITED
STATES, 161 CT.CL. 356 (1963).
THE DIRECTOR, U.S. SECRET SERVICE, HAS FORWARDED THE CLAIMS OF THREE
EMPLOYEES--- MESSRS. EDWARD M. BROWN, EDMOND F. HARRIGAN AND LEO C.
JANUSZEWSKI--- TOGETHER WITH THE AVAILABLE TIME AND ATTENDANCE RECORDS
IN EACH CASE AND COMPUTATIONS OF THE AMOUNTS PROPOSED TO BE PAID IF
THEIR CLAIMS ARE ALLOWABLE. THOSE COMPUTATIONS ARE STATED TO BE MADE
UNDER THE FOLLOWING FORMULA:
"IN COMPUTING THE RETROACTIVE CLAIMS OF THE ABOVE INDIVIDUALS THE
OFFICIAL TIME AND ATTENDANCE RECORDS (SF 1130) FOR THE PERIODS 1955
THROUGH 1956 AND 1961 THROUGH 1964 WERE USED. FOR THE YEARS 1957
THROUGH 1960 THE TIME AND ATTENDANCE REPORTS WERE INADVERTENTLY
DESTROYED AND THEREFORE IT WAS NECESSARY TO USE THE TREASURY GUARD FORCE
LOG TO DETERMINE THE ATTENDANCE OF INDIVIDUALS (SIC) ON DUTY. THE LOG
IS AN ACCURATE RECORD MAINTAINED BY AN OFFICER OF THE GUARD FORCE WHICH
REFLECTS THE NUMBER OF HOURS WORKED, THE DATE AND THE TOUR OF DUTY
ASSIGNED.
"TO DETERMINE THE OVERTIME HOURS PAYABLE THE CLAIM PERIOD WAS BROKEN
DOWN TO REFLECT CHANGES IN RATES OF PAY, DUTY HOURS, ETC., COMPATIBLE
WITH THE LEAVE YEAR. OVERTIME DAYS ACTUALLY WORKED DURING EACH PERIOD
WERE THEN ADDED TO THE BASIC WORK DAYS TO DETERMINE THE MAXIMUM ROLL
CALLS DURING THE PERIOD. THE NUMBER OF NET ROLL CALL DAYS INCLUDING
HOLIDAYS WORKED WERE COUNTED AND DIVIDED BY FOUR TO ARRIVE AT THE HOURLY
RATE OF OVERTIME PAYABLE FOR EACH RATE OF PAY.
"THE TWO SHIFTS, 4 P.M. TO 12 MIDNIGHT AND 12 MIDNIGHT TO 8 A.M.,
BOTH INVOLVED SIX HOURS OF NIGHT DIFFERENTIAL. ONLY THE LATTER GROUP
WOULD BE ENTITLED TO NIGHT DIFFERENTIAL OVERTIME AS A PART OF THE CLAIM
SETTLEMENT. CERTIFIED TIME AND ATTENDANCE DOCUMENTS INDICATING DUTY
HOURS WERE USED FOR THE PERIOD 1955 THROUGH 1956 AND 1961 THROUGH 1964.
THE MISSING YEARS, 1957 THROUGH 1960, WERE DETERMINED BY THE USE OF THE
GUARD FORCE LOG BOOK TO DETERMINE ENTITLEMENT TO NIGHT DIFFERENTIAL. IN
VIEW OF THE LIMITED NUMBER OF CHANGES IN SHIFT ASSIGNMENT THE GUARD LOG
BOOKS WERE CHECKED ON THE FIRST REGULAR WORK DAY OF EACH QUARTER OF THE
CALENDAR YEAR AND OVERTIME NIGHT DIFFERENTIAL FOR THE QUARTER PAID ON
THAT BASIS.
"FEDERAL, STATE AND FICA TAXES WITHHELD ARE ON A PERCENTAGE BASIS IN
THE TAX YEAR WHICH PAID.'
THE PROPOSED METHOD OF COMPUTATION IS IN ACCORDANCE WITH THE METHOD
WE HAVE APPROVED IN OTHER CASES INVOLVING OVERTIME COMPENSATION FOR
EARLY REPORTING OF SECURITY GUARDS EXCEPT THAT WE HAVE REQUIRED A
UNIFORM DEDUCTION OF FOUR OVERTIME UNITS (15 MINUTES IN THIS CASE) PER
YEAR AS A REASONABLE DEDUCTION FOR PROBABLE TARDINESS WHERE RECORDS USED
IN COMPUTING THE AMOUNT DUE DID NOT SHOW IF AND WHEN THE CLAIMANTS HAD
BEEN TARDY. B-155197, MARCH 17, 1965. SINCE TARDINESS HAS NOT BEEN
RECORDED ON THE RECORDS FROM WHICH THE COMPUTATIONS WERE MADE IN THE
CASES PRESENTED, THE UNIFORM DEDUCTION OF FOUR OVERTIME UNITS PER YEAR
(ONE AT THE END OF EACH QUARTER IF DESIRED) SHOULD BE MADE FROM THE
AMOUNTS OTHERWISE DUE MEMBERS OF THE TREASURY GUARD FORCE.
SUBJECT TO THE ABOVE DEDUCTION FOR TARDINESS WE WILL NOT OBJECT IF
THE CLAIMS OF MESSRS. BROWN, HARRIGAN AND JANUSZEWSKI ARE PAID AS
COMPUTED WITHOUT FURTHER REFERENCE TO OUR OFFICE. THE CLAIMS OF OTHER
MEMBERS OF THE TREASURY GUARD FORCE MAY BE PAID ON THE BASIS OF SIMILAR
EVIDENCE AND COMPUTATIONS.
THE ENCLOSURES ATTACHED TO THE LETTER OF OCTOBER 21, 1965, ARE
RETURNED.
B-156666, NOV. 24, 1965
TO THE HONORABLE ARTHUR K. BOLTON, ATTORNEY GENERAL, STATE OF
GEORGIA:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14, 1965, REQUESTING
RECONSIDERATION OF GENERAL ACCOUNTING OFFICE, CLAIMS DIVISION,
SETTLEMENT DATED AUGUST 19, 1965, WHICH DISALLOWED THE CLAIM NO. Z-58
(60) OF THE GEORGIA INSTITUTE OF TECHNOLOGY FOR REFUND OF $42,949.50,
REPRESENTING INTEREST INCOME EARNED BY THE INSTITUTE ON A PAYMENT OF
GRANT FUNDS MADE TO IT BY THE NATIONAL SCIENCE FOUNDATION.
THE RECORDS SHOW THAT IN FEBRUARY 1959 THE NATIONAL SCIENCE
FOUNDATION MADE A GRANT (NSF G-7410) OF $750,000 TO THE GEORGIA
INSTITUTE OF TECHNOLOGY FOR THE SUPPORT OF RESEARCH ENTITLED ,SUPPORT OF
A NUCLEAR RESEARCH REACTOR FACILITY.' THE INSTITUTE DEPOSITED THE FUNDS
IN A LOCAL DEPOSITARY AND RECEIVED INTEREST THEREON IN THE SUM OF
$42,949.50 FOR THE PERIOD MARCH 1, 1959, THROUGH DECEMBER 31, 1962.
THE MATTER HAVING COME TO THE ATTENTION OF THE NATIONAL SCIENCE
FOUNDATION, REQUEST WAS MADE ON THE INSTITUTE TO REFUND THE INTEREST
RECEIVED. THIS ACTION WAS IN ACCORDANCE WITH THE RULE FOLLOWED BY THE
ACCOUNTING OFFICERS OF THE GOVERNMENT TO THE EFFECT THAT INTEREST EARNED
ON GRANTS OF FUNDS MADE BY THE UNITED STATES, AS A RESULT OF DEPOSIT IN
BANKS AND DELAY IN USING THE FUNDS FOR THE PURPOSES FOR WHICH GRANTED,
INURES TO THE BENEFIT OF THE UNITED STATES RATHER THAN TO THE GRANTEE,
AND, UNDER THE TERMS OF SECTION 3617, REVISED STATUTES, 31 UNITED STATES
CODE 484, SHOULD BE ACCOUNTED FOR AND DEPOSITED IN THE TREASURY AS
MISCELLANEOUS RECEIPTS. SEE OUR DECISION REPORTED AT 42 COMP. GEN. 289,
292, COPY OF WHICH IS ENCLOSED FOR CONVENIENCE.
BY LETTER DATED MARCH 8, 1963, THE GEORGIA INSTITUTE OF TECHNOLOGY
TRANSMITTED ITS CHECK FOR $42,949.50 TO THE NATIONAL SCIENCE FOUNDATION.
THE SAID CHECK WAS DEPOSITED IN THE TREASURY OF THE UNITED STATES IN
ACCORDANCE WITH THE TERMS OF THE CITED 31 U.S.C. 484.
UNDER DATE OF DECEMBER 2, 1964, THE INSTITUTE MADE CLAIM AGAINST THE
NATIONAL SCIENCE FOUNDATION FOR REFUND OF THE SUBJECT PAYMENT CITING IN
JUSTIFICATION THEREOF OUR LETTER OF SEPTEMBER 30, 1964, B-152505, TO DR.
LOGAN WILSON, PRESIDENT OF THE AMERICAN COUNCIL ON EDUCATION.
THE FOUNDATION TRANSMITTED THE CLAIM TO OUR OFFICE FOR SETTLEMENT I
ACCORDANCE WITH THE TERMS OF 31 U.S.C. 71, AND OUR REGULATIONS ISSUED IN
CONNECTION THEREWITH.
IN THE LETTER OF SEPTEMBER 30, 1964, WE HAD FOR CONSIDERATION THE
TERMS OF SECTION 205 OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
APPROPRIATION ACT, 1965, APPROVED SEPTEMBER 19, 1964, PUB.L. 88-605, 78
STAT. 963, WHICH READS, AS FOLLOWS:
"NONE OF THE FUNDS CONTAINED IN THIS ACT SHALL BE USED FOR ANY
ACTIVITY THE PURPOSE OF WHICH IS TO REQUIRE ANY RECIPIENT OF ANY PROJECT
GRANT FOR RESEARCH, TRAINING, OR DEMONSTRATION MADE BY ANY
OFFICER OR EMPLOYEE OF THE DEPARTMENT OF HEALTH, EDUCATION, AND
WELFARE TO PAY TO THE UNITED STATES ANY PORTION OF ANY INTEREST OR OTHER
INCOME EARNED ON PAYMENTS OF SUCH GRANT MADE BEFORE JULY 1, 1964.'
WE INTERPRETED THIS STATUTE, IN THE LIGHT OF ITS LEGISLATIVE HISTORY,
TO BE THE INTENT OF THE CONGRESS THAT COLLEGES AND UNIVERSITIES WOULD
NOT BE REQUIRED TO REFUND TO THE UNITED STATES THE INTEREST OR OTHER
INCOME EARNED ON FEDERAL GRANTS MADE TO THEM FOR RESEARCH, TRAINING, OR
DEMONSTRATION PRIOR TO JULY 1, 1964. AND, WE CONCLUDED THAT EVEN THOUGH
THE STATUTE APPLIED ONLY TO FUNDS CONTAINED IN THE DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE APPROPRIATION ACT, 1965, IT WOULD BE CONSISTENT
WITH THE CONGRESSIONAL PURPOSE NOT TO TAKE ANY FURTHER ACTION TO COLLECT
INTEREST OR OTHER INCOME FROM COLLEGES OR UNIVERSITIES, WITH REFERENCE
TO FEDERAL GRANTS MADE BEFORE JULY 1, 1964, BY FEDERAL AGENCIES OTHER
THAN THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE.
THUS, THE EFFECT OF THE TERMS OF SECTION 205 WAS DETERMINED BY OUR
OFFICE TO RELIEVE COLLEGES AND UNIVERSITIES OF ANY LIABILITY TO PAY TO
THE UNITED STATES ANY INTEREST OR OTHER INCOME THEY RECEIVED IN
CONNECTION WITH CERTAIN GRANTS MADE TO THEM BY DEPARTMENTS AND AGENCIES
OF THE GOVERNMENT BEFORE JULY 1, 1964. IN VIEW THEREOF AND SINCE THERE
IS NOTHING IN THE SAID SECTION 205 EXPRESSLY OR BY IMPLICATION TO
AUTHORIZE OR REQUIRE DEPARTMENTS AND AGENCIES TO MAKE REFUNDS TO
COLLEGES AND UNIVERSITIES, ON ACCOUNT OF PAYMENTS OF INTEREST MADE BY
THEM TO THE UNITED STATES IN DISCHARGE OF A VALID CLAIM THEREFOR, THE
CLAIM OF THE GEORGIA INSTITUTE OF TECHNOLOGY ACCORDINGLY WAS DISALLOWED
BY OUR OFFICE ON AUGUST 19, 1965.
IN YOUR LETTER OF SEPTEMBER 14, YOU REQUEST THAT WE RECONSIDER OUR
SETTLEMENT ACTION AND REFUND THE SUM OF $42,949.50 TO THE GEORGIA
INSTITUTE OF TECHNOLOGY. IN SUPPORT OF THE REQUEST YOU STATE THAT "IF
IT WAS THE INTENT AND PURPOSE OF CONGRESS TO INSURE THAT COLLEGES AND
UNIVERSITIES WOULD NOT BE REQUIRED TO REIMBURSE THE UNITED STATES FOR
SUCH FUNDS, IT WOULD SEEM THAT IT WOULD ALSO BE THE INTENT OF CONGRESS
TO REIMBURSE THOSE COLLEGES WHO IN GOOD FAITH REPAID WHAT THEY BELIEVED
TO BE AN OBLIGATION.' YOU STATE FURTHER THAT THE REFUSAL OF THE SUBJECT
CLAIM, IN EFFECT, PENALIZES A DILIGENT INSTITUTION WHILE GRANTING A
BENEFIT TO THOSE WHO HAVE REFUSED TO PAY THEIR DEBTS.
THE CONTEXT OF SECTION 205, QUOTED ABOVE, INDICATES CLEARLY THAT ITS
PROVISIONS PROHIBIT COLLECTION ACTIVITIES BY DEPARTMENTS AND AGENCIES OF
THE GOVERNMENT WHICH WILL RECOVER ANY INTEREST OR OTHER INCOME RECEIVED
BY COLLEGES AND UNIVERSITIES IN CONNECTION WITH FEDERAL GRANTS FOR
RESEARCH, TRAINING, OR DEMONSTRATION MADE PRIOR TO JULY 1, 1964. THAT
IS TO SAY, SUCH GRANTEES ARE RELIEVED OF THE LIABILITY TO PAY TO THE
UNITED STATES ANY INTEREST OR OTHER INCOME EARNED ON GRANTS AWARDED
BEFORE JULY 1, 1964.
THE PAYMENT OF $42,949.50 BY THE INSTITUTE TO THE NATIONAL SCIENCE
FOUNDATION WAS MADE APPROXIMATELY ONE YEAR BEFORE THE LEGISLATION THAT
CONTAINED SECTION 205 WAS CONSIDERED AND ENACTED INTO THE CITED PUB.L.
88-605. SINCE THE INSTITUTE, AT THE TIME OF THIS PAYMENT, WAS OBLIGATED
TO PAY THE UNITED STATES ANY INTEREST INCOME RECEIVED IN CONNECTION WITH
GRANT FUNDS, THE PROPOSAL IN YOUR LETTER TO REFUND THE $42,949.50 TO THE
INSTITUTE WOULD HAVE THE EFFECT OF WAIVING OR GIVING AWAY THE VESTED
RIGHTS CREATED IN THE UNITED STATES UNDER A VALID GRANT AGREEMENT. THE
ADOPTION OF SUCH ACTION APPEARS TO BE UNAUTHORIZED UNDER THE TERMS OF
SECTION 205.
MOREOVER, THE FACT THAT THE SAID SECTION 205 RELIEVED GRANTEES OF THE
LIABILITY TO PAY THE UNITED STATES ANY INTEREST OR OTHER INCOME EARNED
ON GRANTS AWARDED BEFORE JULY 1, 1964, AFFORDS NO BASIS FOR THE VIEW
SUGGESTED BY YOU THAT THE CONGRESS INTENDED ALSO, UNDER THAT SECTION, TO
REIMBURSE THOSE COLLEGES WHO IN GOOD FAITH PAID WHAT THEY WERE OBLIGATED
TO PAY. IF THE CONGRESS HAD SO DESIRED, IT EASILY COULD HAVE PROVIDED
THE NECESSARY AUTHORITY THEREFOR.
ALSO BEARING ON THIS MATTER IS SECTION 3617, REVISED STATUTES, 31
U.S.C. 484, WHICH PROVIDES THAT THE GROSS AMOUNT OF ALL MONEYS RECEIVED
FROM WHATEVER SOURCE FOR THE USE OF THE UNITED STATES SHALL BE PAID INTO
THE TREASURY WITHOUT ABATEMENT OR DEDUCTION. THE COLLECTION AND DEPOSIT
OF $42,949.50 INTO THE TREASURY MUST BE REGARDED AS HAVING BEEN MADE
PROPERLY AND AS REQUIRED BY LAW.
CONSEQUENTLY, AND IN VIEW OF THE PROVISIONS OF ARTICLE 1, SECTION 9
CLAUSE 7, CONSTITUTION OF THE UNITED STATES THAT "NO MONEY SHALL BE
DRAWN FROM THE TREASURY, BUT IN CONSEQUENCE OF APPROPRIATIONS MADE BY
LAW * * *" OF THE PROPOSED REFUND MAY NOT BE MADE IN THE ABSENCE OF
SPECIFIC APPROPRIATION BY THE CONGRESS.
ACCORDINGLY, AFTER THOROUGH CONSIDERATION OF THE MATTER AND FOR THE
REASONS STATED HEREIN, YOU ARE ADVISED THAT THERE IS NO BASIS UPON WHICH
TO REVISE THE PREVIOUS ACTION TAKEN BY THE CLAIMS DIVISION OF THE
GENERAL ACCOUNTING OFFICE WHICH DECLINED TO AUTHORIZE REFUND OF THE
AMOUNT OF $42,949.50 TO THE GEORGIA INSTITUTE OF TECHNOLOGY, AND SUCH
ACTION IS AFFIRMED.
WHILE, AS POINTED OUT IN YOUR LETTER, DENIAL OF THE REFUND IN
QUESTION MAY GIVE RISE TO A SEEMING INEQUITY IN THAT THE INSTITUTION, AS
A RESULT OF PAYMENT TO THE UNITED STATES OF THE INTEREST INCOME RECEIVED
BY IT FROM FEDERAL GRANT FUNDS, IS IN A WORSE POSITION THAN THOSE
GRANTEES WHO DELAYED IN REFUNDING INTEREST AND WHOSE DEBTS WERE RELIEVED
BY SECTION 205, ANY ELEMENTS OF EQUITY THAT MAY BE PRESENT IN THIS CLAIM
ARE MATTERS PRIMARILY FOR CONSIDERATION OF THE CONGRESS RATHER THAN BY
OUR OFFICE.
WITH REFERENCE TO YOUR INQUIRY AS TO THE PROCEDURE AVAILABLE TO YOU
IN APPEALING FROM OUR DECISION, YOU ARE ADVISED THAT THERE IS NO
PROCEDURE PRESCRIBED BY LAW FOR APPEALING OUR DECISIONS. HOWEVER, WE
INVITE YOUR ATTENTION TO THE PROVISIONS OF SECTION 1491 OF TITLE 28 OF
THE UNITED STATES CODE CONCERNING THE JURISDICTION OF THE COURT OF
CLAIMS WHERE ACTIONS MAY BE CONSIDERED DE NOVO.
B-157529, NOV. 24, 1965
TO WHITEWATER ELECTRONICS, INC. :
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 19, 1965, AND
TO OTHER CORRESPONDENCE FROM YOUR COMPANY, PROTESTING THE REJECTION OF
YOUR BID UNDER INVITATION FOR BIDS DSA-9-65-4078 AND AWARD OF THE
CONTRACT TO COLLINS RADIO COMPANY. THE INVITATION SOLICITED BIDS FOR
546 FILTERS, FSN 5915-711-0388, COLLINS PART NO. 5269163009, AND
INCLUDED COLLINS DRAWINGS AND SPECIFICATIONS. PRICES WERE TO BE
SUBMITTED ON THE BASIS OF BID A (FIRST ARTICLE, APPROVAL NOT REQUIRED)
OR BID B (FIRST ARTICLE, APPROVAL REQUIRED). BIDDERS WHO HAD
PREVIOUSLY, WITHIN 18 MONTHS, EITHER DIRECTLY OR INDIRECTLY,
SATISFACTORILY FURNISHED THE FILTERS TO THE GOVERNMENT, WERE ELIGIBLE TO
BID ON THE BASIS OF FIRST ARTICLE, APPROVAL NOT REQUIRED, PROVIDED THEY
FURNISHED A CITATION TO THE PREVIOUS CONTRACT OR ORDER NUMBER ENTITLING
THEM TO A WAIVER OF TESTING. YOUR LOW BID OF $30 PER UNIT WAS BASED ON
RECEIVING A WAIVER OF FIRST ARTICLE APPROVAL. IT IS REPORTED THAT SINCE
NO EVIDENCE WAS FOUND IN THE ADMINISTRATIVE OFFICE THAT YOU HAD
PREVIOUSLY FURNISHED THE FILTER AND SINCE YOU FAILED TO FURNISH SUCH
EVIDENCE, YOUR BID WAS REJECTED AS NONRESPONSIVE. SUCH REJECTION
APPEARS PROPER IN THIS CASE. SEE 40 COMP. GEN. 132; B-155846, MARCH
10, 1965; B-155688, FEBRUARY 17, 1965.
YOU NOW HAVE SUBMITTED EVIDENCE, HOWEVER, THAT YOU INTENDED TO BID ON
THE BASIS OF FURNISHING A FIRST ARTICLE FOR APPROVAL (BID B) BUT THAT,
THROUGH A CLERICAL ERROR, THE PRICE WAS PLACED NEXT TO BID A. IN
SUBSTANTIATION OF YOUR ALLEGATION OF ERROR YOU POINT OUT THAT YOU
COMPLETED A PROPOSED DELIVERY SCHEDULE ON THE BASIS OF FIRST ARTICLE
APPROVAL (EXHIBIT D) AND ATTACHED IT TO THE BID. ALTHOUGH THERE WAS AN
APPARENT AMBIGUITY IN THE BID, IT OBVIOUSLY COULD NOT BE ASCERTAINED
FROM THE BID THE BASIS UPON WHICH YOU INTENDED TO BID. AN UNRESPONSIVE
BID DOES NOT CONSTITUTE AN OFFER WHICH MAY PROPERLY BE ACCEPTED, AND TO
PERMIT A BIDDER TO MAKE HIS BID RESPONSIVE BY CHANGING A MATERIAL PART
OF THE BID ON THE BASIS OF AN ERROR ALLEGED AFTER OPENING WOULD BE
TANTAMOUNT TO PERMITTING A BIDDER TO SUBMIT A NEW BID. SEE 38 COMP.
GEN. 819; 40 ID. 432.
IN VIEW OF THESE CIRCUMSTANCES, YOUR PROTEST WITH RESPECT TO
INVITATION FOR BIDS DSA-9-65-4078 IS DENIED.
YOU ALSO QUESTIONED THE PRESENT DETERMINATION BY THE DEFENSE
ELECTRONICS SUPPLY CENTER THAT THESE MECHANICAL FILTERS MUST BE PROCURED
ONLY FROM COLLINS RADIO COMPANY. THIS DECISION IS BASED PRIMARILY UPON
THE DECISION OF THE DEPARTMENT OF THE AIR FORCE THAT THEY WILL USE ONLY
COLLINS' FILTERS.
THE DEFENSE ELECTRONICS SUPPLY CENTER IS A PROCURING FACILITY FOR ALL
THE ARMED SERVICES, HAVING TAKEN OVER THE RESPONSIBILITY FOR PROCURING
THE MECHANICAL FILTERS FROM THE U.S. ARMY SIGNAL CORPS. THESE
PROCUREMENTS ARE GENERALLY FOR STOCK REPLENISHMENTS AT VARIOUS DEPOTS,
ALTHOUGH SOME ARE FOR PARTICULAR SERVICE REQUIREMENTS. IT APPEARS THAT
THE AIR FORCE HAS CONSISTENTLY FAVORED THE COLLINS FILTERS; HOWEVER,
DEFENSE ELECTRONICS SUPPLY CENTER, NOT BEING AWARE OF THE AIR FORCE'S
INSISTENCE IN THE MATTER, UNTIL JULY 1965, AND IN AN EFFORT TO INCREASE
THE COMPETITIVE BIDDING, HAS PROCURED THESE FILTERS BY FORMAL
ADVERTISING. ALTHOUGH YOUR COMPANY HAS PRODUCED THESE FILTERS
PREVIOUSLY, THERE HAVE BEEN NO CONTRACTS FOR SPECIFIC AIR FORCE
REQUESTS, SO THIS PRESENT CONTROVERSY HAS NOT BEEN CONSIDERED
PREVIOUSLY. FURTHER, YOU HAVE NOT IN THE PAST PRODUCED UNDER A CONTRACT
REQUIRING FIRST ARTICLE APPROVAL.
THE AIR FORCE INSISTENCE ON SOLE-SOURCE PROCUREMENT FROM COLLINS
RADIO COMPANY APPARENTLY IS BASED UPON THE FACT THAT THE MECHANICAL
FILTERS ARE TO BE USED AS REPLACEMENTS IN COLLINS RADIOS PRESENTLY IN
USE, AND THAT COLLINS SPECIFICATIONS MUST BE USED UNTIL MILITARY
SPECIFICATIONS, CURRENTLY IN PREPARATION, ARE COMPLETED. ALSO, THE AIR
FORCE ENGINEERS ARE OF THE OPINION THAT THESE SPECIFICATIONS ARE NOT
ADEQUATE FOR COMPETITIVE BIDDING. ALTHOUGH DEFENSE ELECTRONICS SUPPLY
CENTER HAS AN ENGINEERING STAFF, WE HAVE BEEN ADVISED THAT THEIR
JURISDICTION DOES NOT EXTEND TO THIS TYPE OF EVALUATION, AND THEY FIND
THEMSELVES BOUND BY THE AIR FORCE DETERMINATION. SECONDLY, IN TWO
INSTANCES, THE AIR FORCE, HAVING DRAWN WHITEWATER FILTERS FROM STOCK,
HAS REPORTED UNSATISFACTORY RESULTS.
WE RECEIVED, THROUGH THE DEFENSE SUPPLY AGENCY, A REPORT FROM THE
DEFENSE ELECTRONICS SUPPLY CENTER, DATED NOVEMBER 1, 1965, EXPLAINING
THEIR POSITION IN THE MATTER. WE ARE ENCLOSING A COPY OF THAT REPORT,
FOR ANY COMMENTS YOU MAY DESIRE TO MAKE IN WRITING TO US.
B-157552, NOV. 24, 1965
TO LIEUTENANT COLONEL PLATON H. KARMERES, USAR:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 13, 1965,
PERTAINING TO YOUR CLAIM FOR 2 DAYS' ADDITIONAL PAY AND ALLOWANCES FOR
TRAVEL TIME INCIDENT TO TRAVEL PERFORMED BY YOU FROM WESTCHESTER,
ILLINOIS, TO KANSAS CITY, MISSOURI, MARCH 21, 1964, AND RETURN ON APRIL
4, 1964, IN CONNECTION WITH A TOUR OF ACTIVE DUTY FOR TRAINING AS A
RESERVE OFFICER.
BY LETTER ORDER NO. T-2-145, HEADQUARTERS, XI UNITED STATES ARMY
CORPS, ST. LOUIS, MISSOURI, YOU WERE ORDERED TO ACTIVE DUTY FOR TRAINING
FOR A 13-DAY PERIOD PLUS THE TIME NECESSARY TO PERFORM TRAVEL. THAT
ORDER, WHICH WAS ADDRESSED TO YOU AT HEADQUARTERS AND HEADQUARTERS
COMPANY, 85TH DIVISION (TRAINING), CHICAGO, ILLINOIS, DIRECTED YOU TO
PROCEED TO THE SEMINAR ADMINISTRATIVE OFFICE, ROOM 403, MUNICIPAL
AUDITORIUM, KANSAS CITY, MISSOURI, IN SUFFICIENT TIME TO REPORT BETWEEN
8 A.M. AND 3 P.M., MARCH 22, 1964, AND PROVIDED THAT UPON SATISFACTORY
COMPLETION OF THE PERIOD OF ACTIVE DUTY FOR TRAINING, UNLESS SOONER
RELIEVED OR EXTENDED BY PROPER AUTHORITY, YOU WERE TO RETURN TO THE
PLACE WHERE YOU ENTERED ON SUCH ACTIVE DUTY. ALSO, THAT ORDER
AUTHORIZED YOU TO TRAVEL BY PUBLIC CARRIER (LAND, SEA OR AIR). IT
APPEARS THAT YOU DEPARTED FROM YOUR HOME IN WESTCHESTER, ILLINOIS, A
SUBURB OF CHICAGO, ILLINOIS, ON MARCH 21, 1964, BY PRIVATELY OWNED
AUTOMOBILE AND ARRIVED IN KANSAS CITY ON THE SAME DATE. THE SEMINAR
SESSIONS COMMENCED MARCH 23, 1964, AND AFTER COMPLETION THEREOF AND
SIGN-OUT AT APPROXIMATELY 1:30 P.M., ON APRIL 3, 1964, YOU DEPARTED FROM
KANSAS CITY THE SAME DAY BY PRIVATELY OWNED AUTOMOBILE, ARRIVING IN
WESTCHESTER THE FOLLOWING DAY.
ON APRIL 4, 1964, YOU WERE PAID A MILEAGE ALLOWANCE AS REIMBURSEMENT
OF YOUR EXPENSES INCIDENT TO THE TRAVEL PERFORMED TO AND FROM KANSAS
CITY AND 13 DAYS' PAY AND ALLOWANCES COVERING THE PERIOD MARCH 22 TO
APRIL 3, 1964. SUBSEQUENTLY YOU CLAIMED ADDITIONAL PAY AND ALLOWANCES
TO COVER THE DAYS ON WHICH YOU PERFORMED TRAVEL TO AND FROM KANSAS CITY,
THAT IS, MARCH 21 AND APRIL 4, 1964, RESPECTIVELY. THE CLAIM WAS DENIED
BY THE OFFICE OF THE INSPECTOR GENERAL, HEADQUARTERS, FIFTH UNITED
STATES ARMY, ON JULY 29, 1964, AND AFTER IT WAS REFERRED TO THE FINANCE
CENTER, U.S. ARMY, INDIANAPOLIS, INDIANA, BY AN ASSISTANT ADJUTANT
GENERAL, HEADQUARTERS, 85TH DIVISION (TRAINING), THE CLAIM WAS FORWARDED
TO OUR CLAIMS DIVISION FOR APPROPRIATE ACTION. BY SETTLEMENT DATED
AUGUST 10, 1965, THE CLAIMS DIVISION DISALLOWED THE CLAIM FOR THE REASON
THAT YOU COULD HAVE USED AVAILABLE COMMERCIAL AIR TRANSPORTATION ON
MARCH 22 AND APRIL 3, 1964, FOR YOUR TRAVEL PURPOSES AND, THEREFORE, IT
WAS NOT NECESSARY FOR YOU TO PERFORM TRAVEL ON MARCH 21 AND APRIL 4,
1964, IN ORDER TO COMPLY WITH LETTER ORDER NO. T-2-145. ALSO, MENTION
WAS MADE IN THAT SETTLEMENT OF DEPARTMENT OF THE ARMY MESSAGE 955588,
DATED FEBRUARY 13, 1964, WHICH ESTABLISHED THE POLICY FOR DETERMINING
ALLOWABLE TRAVEL TIME FOR MEMBERS ORDERED TO ACTIVE DUTY WITH PAY.
IN YOUR LETTER OF AUGUST 13, 1965, YOU QUESTION THE PROPRIETY OF THE
CLAIMS DIVISION SETTLEMENT FOR THE REASONS (1) THAT HEADQUARTERS, XI
UNITED STATES ARMY CORPS DID NOT DISTRIBUTE THE TRAVEL INFORMATION
CONTAINED IN DEPARTMENT OF THE ARMY MESSAGE 955588 UNTIL AFTER YOUR TOUR
OF DUTY STARTED, (2) THAT LETTER ORDER NO. T-2-145 SPECIFICALLY PROVIDED
FOR 13 DAYS (ACTIVE DUTY FOR TRAINING) PLUS TIME FOR TRAVEL, AND (3)
THAT AIR TRAVEL WAS AUTHORIZED, BUT WAS NOT DIRECTED. IN ADDITION, YOU
SAY THAT PRIOR TO THE RECEIPT OF THE INFORMATION FROM XI UNITED STATES
ARMY CORPS THE POLICY WAS FOR THE ALLOWANCE OF TRAVEL TIME ON THE BASIS
OF ONE DAY PRIOR TO THE REPORTING DATE AND ONE DAY FOR RETURN TRAVEL.
REGULATIONS GOVERNING THE PAY OF RESERVE MEMBERS ON ACTIVE DUTY AND
ACTIVE DUTY FOR TRAINING AND IN EFFECT AT THE TIME OF YOUR ACTIVE DUTY
FOR TRAINING WERE CONTAINED IN DEPARTMENT OF THE ARMY MESSAGE 955588,
DATED FEBRUARY 13, 1964, WHICH, IN PERTINENT PART, READ AS FOLLOWS:
"B. A MEMBER ORDERED TO ACDUTRA FOR 30 DAYS OR LESS IS AUTHORIZED
TRAVEL TIME BASED ON THE LATEST COMMERCIAL AIR SCHEDULES WHICH WILL
PERMIT REPORTING ON THE DATE INDICATED IN ORDERS REGARDLESS OF MEANS OF
TRAVEL ACTUALLY USED. ADDITIONAL TRAVEL TIME REQUIRED TO TRAVEL TO OR
FROM AIR TERMINAL/S), NOT TO EXCEED 2 HOURS FOR EACH TRIP, SHOULD BE
INCLUDED IN THE TRAVEL TIME. TRAVEL TIME WILL BE LIMITED TO ONE DAY
WITH THE FOLLOWING EXCEPTIONS:
"/1) IF AIR TRANSPORTATION IS NOT REASONABLY AVAILABLE, TRAVEL TIME
WILL BE BASED ON TIME REQUIRED TO TRAVEL BY FASTEST SURFACE
TRANSPORTATION NOT TO EXCEED TIME ACTUALLY USED.
"/2) IF AIR SCHEDULES OR TRANSPORTATION DELAYS BEYOND THE CONTROL OF
THE MEMBER PRECLUDE COMPLETION OF TRAVEL WITHIN ONE DAY, ACTUAL AIR
TRAVEL TIME AND TRAVEL TIME REQUIRED TO AND FROM AIR TERMINALS WILL BE
ALLOWED. AIR TRANSPORTATION IS CONSIDERED REASONABLY AVAILABLE WHEN
COMMERCIAL AIR TERMINALS ARE LOCATED WITHIN 50 MILES OF THE TRAINING
STATION AND 50 MILES OF THE PLACE FROM WHICH ORDERED TO ACDUTRA.'
UNDER THOSE REGULATIONS A MEMBER OF THE RESERVE TRAVELING TO HIS
FIRST DUTY STATION UNDER AN ORDER SPECIFYING ACTIVE DUTY FOR TRAINING OF
30 DAYS OR LESS IS ENTITLED TO TRAVEL TIME FOR NECESSARY AND OFFICIAL
TRAVEL FROM THE DATE HE NECESSARILY WOULD BE REQUIRED TO BEGIN TRAVEL
FROM HIS HOME, BASED ON APPLICABLE COMMERCIAL AIR SCHEDULES WHICH WILL
PERMIT REPORTING ON THE DATE SHOWN IN THE ORDER WHEN SUCH MEANS OF
TRANSPORTATION IS REASONABLY AVAILABLE, IRRESPECTIVE OF THE MODE OF
TRANSPORTATION ACTUALLY UTILIZED BY HIM. SINCE YOUR ACTIVE DUTY FOR
TRAINING ORDERS REQUIRED YOU TO REPORT TO THE SEMINAR ADMINISTRATIVE
OFFICE IN KANSAS CITY, BETWEEN 8 A.M. AND 3 P.M., MARCH 22, 1964, AND IN
VIEW OF A REPORT FROM OUR TRANSPORTATION DIVISION WHICH SHOWS THAT YOU
COULD HAVE DEPARTED FROM CHICAGO BY COMMERCIAL AIR AT 9:45 A.M., MARCH
22, 1964, AND ARRIVED IN KANSAS CITY AT 11:09 A.M., THAT DAY, IN
SUFFICIENT TIME TO REPORT TO THE SEMINAR ADMINISTRATIVE OFFICE, THE DATE
OF YOUR ENTRY ON ACTIVE DUTY UNDER THE PURVIEW OF THE ABOVE REGULATIONS
MUST BE CONSIDERED AS MARCH 22, 1964. THEREFORE, THERE APPEARS TO BE NO
LEGAL AUTHORITY FOR PAYMENT TO YOU OF TRAVEL TIME FOR MARCH 21, 1964,
THE DATE OF THE COMMENCEMENT OF YOUR ACTUAL TRAVEL TO KANSAS CITY BY
PRIVATELY OWNED AUTOMOBILE.
IN CONNECTION WITH YOUR RETURN TRAVEL, THE MENTIONED REGULATIONS
CONTEMPLATE PAYMENT TO YOU OF PAY AND ALLOWANCES FOR THE PERIOD OF
NECESSARY AND OFFICIAL TRAVEL FROM THE TIME FOLLOWING YOUR SIGN-OUT AT
1:30 P.M., APRIL 3, 1964, UNTIL YOUR ARRIVAL AT YOUR HOME, BASED ON
COMMERCIAL AIR SCHEDULES APPLICABLE TO THAT PERIOD. OUR TRANSPORTATION
DIVISION REPORT SHOWS THAT YOU COULD HAVE DEPARTED FROM KANSAS CITY BY
COMMERCIAL AIR AS LATE AS 9 P.M., APRIL 3, 1964, AND ARRIVED IN CHICAGO
10:05 P.M., IN SUFFICIENT TIME TO ARRIVE AT YOUR HOME PRIOR TO MIDNIGHT
THAT DATE. ACCORDINGLY, PAYMENT TO YOU TO COVER TRAVEL TIME FOR APRIL
4, 1964, THE DATE YOU ARRIVED AT YOUR HOME, WOULD BE CONTRARY TO THE
GOVERNING REGULATIONS.
WHILE LETTER ORDER NO. T-2-145 ORDERED YOU TO ACTIVE DUTY FOR
TRAINING FOR PERIOD OF 13 DAYS PLUS THE TIME NECESSARY TO PERFORM
TRAVEL, SUCH ORDER HAVING BEEN ISSUED AFTER THE RELEASE DATE OF
DEPARTMENT OF THE ARMY MESSAGE 955588 MUST BE READ IN CONJUNCTION
THEREWITH. PURSUANT TO THAT MESSAGE PAYMENT TO YOU FOR THE TIME
NECESSARY TO PERFORM TRAVEL IS REQUIRED TO BE BASED UPON CONSTRUCTIVE
TRAVEL TIME AS SHOWN BY COMMERCIAL AIR SCHEDULES AND, AS INDICATED
ABOVE, UNDER THESE
SCHEDULES NECESSARY TRAVEL COULD HAVE BEEN PERFORMED BY AIR ON MARCH
22, 1964, THE DAY YOU WERE REQUIRED TO REPORT FOR ACTIVE DUTY FOR
TRAINING AND ON APRIL 3, 1964, THE DAY YOU WERE RELEASED FROM SUCH DUTY,
BOTH OF THESE BEING INCLUDED IN THE 13-DAY PERIOD FOR WHICH YOU WERE
PAID PAY AND ALLOWANCES. THE FACT THAT AIR TRAVEL WAS NOT SPECIFICALLY
DIRECTED IN THE ORDER IS NOT CONTROLLING, DEPARTMENT OF THE ARMY MESSAGE
955588 BEING FOR APPLICATION IN YOUR CASE IRRESPECTIVE OF WHETHER OR NOT
AIR TRAVEL WAS DIRECTED IN YOUR ORDER AND REGARDLESS OF THE MODE OF
TRANSPORTATION ACTUALLY UTILIZED BY YOU. ALSO, THE FAILURE OF
HEADQUARTERS, XI UNITED STATES ARMY CORPS TO DISTRIBUTE THAT MESSAGE TO
HEADQUARTERS, 85TH DIVISION (TRAINING), PRIOR TO THE COMMENCEMENT OF
YOUR TOUR OF ACTIVE DUTY FOR TRAINING MAY NOT BE CONSIDERED AS CREATING
AN OBLIGATION ON THE PART OF THE GOVERNMENT TO PAY YOU PAY AND
ALLOWANCES FOR TRAVEL TIME CONTRARY TO THE PROVISIONS OF THAT MESSAGE.
IT IS WELL SETTLED THAT IN THE ABSENCE OF SPECIFIC STATUTORY PROVISION,
THE UNITED STATES IS NOT LIABLE FOR NEGLIGENT ACTIONS OF ITS OFFICERS,
AGENTS, OR EMPLOYEES, EVEN THOUGH COMMITTED IN THE PERFORMANCE OF THEIR
OFFICIAL DUTIES. GERMAN BANK V. UNITED STATES, 148 U.S. 573; 19 COMP.
GEN. 503; AND 22 COMP. GEN. 221.
IN VIEW OF THE FOREGOING, WE MUST HOLD THAT THE SETTLEMENT OF AUGUST
10, 1965, WAS CORRECT AND,
B-157752, NOV. 24, 1965
TO PRODUCTION CLEANING SYSTEMS DIVISION, NATIONAL ULTRASONIC
CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27, 1965, WITH
ENCLOSURE, PROTESTING AGAINST THE ACTION OF THE UNITED STATES NAVY
PURCHASING OFFICE, WASHINGTON, D.C., IN REJECTING YOUR LATE BID
SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. IFB600-266-66 COVERING
THE FURNISHING OF TWO CLEANING MACHINES AND PROVISIONING TECHNICAL
DOCUMENTATION.
THE INVITATION FOR BIDS WAS ISSUED ON SEPTEMBER 7, 1965, AND PROVIDED
THAT BIDS WERE TO BE OPENED AT 10:30 A.M., E.D.S.T., SEPTEMBER 24, 1965.
THE NATIONAL ULTRASONIC CORPORATION'S METER STAMP SHOWED MAILING DATE
OF SEPTEMBER 23, 1965, AND THE ENVELOPE WAS MARKED AIRMAIL AND SPECIAL
DELIVERY. YOUR BID WAS RECEIVED LATE IN THE BID ROOM AT 11:53 A.M.,
E.D.S.T., ON THE DAY OF BID OPENING.
YOU CONTEND THAT SUFFICIENT TIME WAS ALLOWED FOR YOUR BID TO HAVE
BEEN RECEIVED BY 10:30 A.M. ON SEPTEMBER 24, 1965. HOWEVER, THE POST
OFFICE DEPARTMENT IN WASHINGTON, D.C., ADVISES THAT 2 HOURS SHOULD BE
ALLOWED FOR SPECIAL DELIVERY FROM THE WASHINGTON POST OFFICE. IN OTHER
WORDS, SPECIAL DELIVERY MAIL RECEIVED IN WASHINGTON 2 HOURS OR MORE
PRIOR TO BID OPENING SHOULD BE RECEIVED ON TIME. NATIONAL ULTRASONIC
CORPORATION'S BID WAS NOT RECEIVED IN THE SPECIAL DELIVERY SECTION OF
THE WASHINGTON POST OFFICE UNTIL 9:15 A.M. AND THEREFORE IT MUST BE
CONSIDERED LATE FOR REASONS OTHER THAN A DELAY IN THE MAILS.
PARAGRAPH 2-303.2 OF THE ARMED SERVICES PROCUREMENT REGULATION
PROVIDES AS FOLLOWS:
"2-303.2 CONSIDERATION FOR AWARD. A LATE BID SHALL BE CONSIDERED FOR
AWARD ONLY IF:
"/I) IT IS RECEIVED BEFORE AWARD; AND EITHER
"/II) IT WAS 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 THAT THE LATENESS WAS DUE SOLELY TO A DELAY IN THE
MAILS (BASED ON EVIDENCE PURSUANT TO 2-303.3), OR TO A DELAY BY THE
TELEGRAPH COMPANY FOR WHICH THE BIDDER WAS NOT RESPONSIBLE; OR
"/III) IF SUBMITTED BY MAIL (OR BY TELEGRAM WHERE AUTHORIZED), IT WAS
RECEIVED AT THE GOVERNMENT INSTALLATION IN SUFFICIENT TIME TO BE
RECEIVED AT THE OFFICE DESIGNATED IN THE INVITATION BY THE TIME SET FOR
OPENING AND, EXCEPT FOR DELAY DUE TO MISHANDLING ON THE PART OF THE
GOVERNMENT AT THE INSTALLATION, WOULD HAVE BEEN RECEIVED ON TIME AT
THE OFFICE DESIGNATED. THE ONLY EVIDENCE ACCEPTABLE TO ESTABLISH TIMELY
RECEIPT AT THE GOVERNMENT INSTALLATION IS THAT WHICH CAN BE ESTABLISHED
UPON EXAMINATION OF AN APPROPRIATE DATE OR TIME STAMP (IF ANY) OF SUCH
INSTALLATION, OR OF OTHER DOCUMENTARY EVIDENCE OF RECEIPT AT SUCH
INSTALLATION (IF READILY AVAILABLE) WITHIN THE CONTROL OF SUCH
INSTALLATION OR OF THE POST OFFICE SERVING IT.'
YOUR BID WAS NOT SENT EITHER BY REGISTERED OR CERTIFIED MAIL, AS
REQUIRED BY THE REGULATIONS AS A PREREQUISITE TO ITS CONSIDERATION IN
THE EVENT OF LATE RECEIPT. UNDER THIS REGULATION A BIDDER WHO ELECTS TO
USE THE POSTAL SERVICE FOR DELIVERY OF HIS BID WITHOUT REGISTRATION OR
CERTIFICATION ASSUMES THE RISK OF LATE DELIVERY TO THE GOVERNMENT
INSTALLATION SPECIFIED IN THE INVITATION AND IS PUT ON NOTICE THAT THE
DATE AND TIME OF DELIVERY TO SUCH INSTALLATION WILL BE ESTABLISHED BY
THE RECORDS OF SUCH INSTALLATION. WHILE THIS REGULATION MAY RESULT IN
THE FAILURE OF THE GOVERNMENT TO RECEIVE THE BENEFIT OF LOWER BIDS WHICH
ARE RECEIVED AFTER BID OPENING, ITS ADOPTION HAS BEEN DETERMINED TO BE
NECESSARY TO THE ORDERLY AND TIMELY PROCUREMENT OF SUPPLIES AND SERVICES
BY THE GOVERNMENT. SEE B-054718, SEPTEMBER 4, 1964. ACCORDINGLY, IT
APPEARS THAT THE ACTION OF THE AGENCY IN REJECTING YOUR BID IS NOT
SUBJECT TO QUESTION BY THIS OFFICE.
B-157787, NOV. 24, 1965
TO MR. AND MRS. DONALD E. DUNHAM, SR. :
REFERENCE IS MADE TO OUR LETTER OF OCTOBER 13, 1965, B-157787, AND TO
THE LETTER DATED NOVEMBER 8, 1965, SIGNED BY MR. DUNHAM, RELATIVE TO THE
CLAIM AGAINST THE GOVERNMENT ARISING OUT OF A COLLISION ON JULY 2, 1965,
INVOLVING THE AUTOMOBILE OF MR. PAUL BYRD STEAGALL, AN EMPLOYEE OF THE
GENERAL ACCOUNTING OFFICE.
THE INFORMATION REQUESTED FROM MR. BURT PETERSON OF THE MICHIGAN
CLAIMS SERVICE HAS BEEN RECEIVED. AN EXAMINATION OF THE EVIDENCE OF
RECORD IN THIS CASE INDICATES THAT YOU ARE ENTITLED TO THE AMOUNT OF
$366.96, CONSISTING OF $332.93 (THE LOWER OF THE TWO ESTIMATES SUBMITTED
BY YOU) PLUS $7.50 FOR A WHEEL AND $26.53 FOR A TIRE, WHICH YOU INDICATE
WERE RUINED BUT ARE NOT INCLUDED IN THE ESTIMATE. A CHECK IN THAT
AMOUNT WILL BE ISSUED AND MAILED TO YOU SHORTLY. ALTHOUGH ONLY MR.
DUNHAM SIGNED THE CLAIM, BETTIE J. DUNHAM IS LISTED AS THE OWNER OF THE
DAMAGED AUTOMOBILE. HENCE THE CHECK WILL BE DRAWN JOINTLY IN BOTH YOUR
NAMES.
YOU ARE ADVISED THAT 28 U.S.C. 2672, WHICH AUTHORIZES THE SETTLEMENT
OF CLAIMS OF THE TYPE HERE INVOLVED, PROVIDES THAT---
"THE ACCEPTANCE BY THE CLAIMANT OF ANY SUCH AWARD, COMPROMISE, OR
SETTLEMENT SHALL BE FINAL AND CONCLUSIVE ON THE CLAIMANT, AND SHALL
CONSTITUTE A COMPLETE RELEASE OF ANY CLAIM AGAINST THE UNITED STATES AND
AGAINST THE EMPLOYEE OF THE GOVERNMENT WHOSE ACT OR OMISSION GAVE RISE
TO THE CLAIM, BY REASON OF THE SAME SUBJECT MATTER.'
IN VIEW THEREOF, YOUR ACCEPTANCE OF THE CHECK IN THE AMOUNT OF
$366.96 WILL CONSTITUTE A COMPLETE RELEASE TO THE GOVERNMENT AND TO MR.
STEAGALL FROM ANY FURTHER LIABILITY FOR DAMAGES ARISING FROM THE
ACCIDENT HERE INVOLVED.
B-157916, NOV. 24, 1965
TO NEW YORK SHIPBUILDING CORPORATION:
BY LETTER DATED OCTOBER 26, 1965, WITH ENCLOSURES, YOU PROTESTED
AGAINST ANY AWARD TO CANADIAN VICKERS INDUSTRIES LTD. UNDER INVITATION
FOR BIDS NO. 189-5-66, ISSUED ON JULY 8, 1965, BY THE NAVAL SUPPLY
CENTER, NORFOLK, VIRGINIA.
THE INVITATION, AS AMENDED, REQUESTED BIDS FOR ONE SUBMARINE MODEL,
.2333 SCALE; ONE SUBMARINE STERN SECTION, 1/2 SCALE; AND ONE SECTION
NO. 7, FULL SCALE. BIDDERS WERE ADVISED THAT:
"SUBJECT TO THE PROVISIONS OF PARAGRAPH 8 OF THE TERMS AND CONDITIONS
OF THE INVITATION FOR BIDS, AWARD WILL GENERALLY BE MADE TO A SINGLE
BIDDER ON EACH ENTIRE LOT. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT
TO AWARD BY ITEM WHEN THE CONTRACTING OFFICER DETERMINES THAT IT IS
ADVANTAGEOUS TO THE GOVERNMENT.'
PARAGRAPH 8 OF THE TERMS AND CONDITIONS PROVIDED IN PERTINENT PART
THAT:
"8. AWARD OF CONTRACT.--- (A) THE CONTRACT WILL BE AWARDED TO THAT
RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS,
WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS
CONSIDERED.
"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID,
UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS. * * *"
BY AMENDMENT NO. 2 TO THE INVITATION, THE DUTY-FREE ENTRY--- CANADIAN
SUPPLIES CLAUSE PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION
(ASPR) 6-605.2 WAS INCORPORATED IN THE INVITATION BECAUSE THE
PROCUREMENT INVOLVED THE PURCHASE OF END ITEMS CONTAINED IN THE LIST
MAINTAINED BY THE NAVY UNDER ASPR 6-103.5 (A) OF CANADIAN SUPPLIES (ASPR
6-101 (E) ( DETERMINED TO BE OF A MILITARY CHARACTER.
SIX BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 17, 1965, AND THE TWO
LOWEST BIDS WERE AS FOLLOWS:
CHART
ITEM 1 ITEM 2 ITEM 3 TOTAL NEW YORK SHIPBUILDING
$344,488 $281,750 $132,674 $758,912 CANADIAN VICKERS
213,725 769,965
YOU PROTEST AGAINST ANY AWARD TO CANADIAN VICKERS SINCE THE
INVITATION DOES NOT PERMIT A RESPONSIVE BID BY A CANADIAN FIRM AS A
PRIME CONTRACTOR; THAT THE DUTY-FREE CLAUSE MERELY PERMITS A DOMESTIC
FIRM TO IMPORT CANADIAN END PRODUCTS DUTY FREE; AND THAT THE AMOUNT OF
DUTY REQUIRED TO BE PAID MUST BE TAKEN INTO CONSIDERATION IN THE
EVALUATION OF BIDS AS REQUIRED BY ASPR WHETHER THE DUTY IS PAYABLE OR
NOT.
AN EXAMINATION OF CANADIAN VICKERS' BID DOES NOT INDICATE THAT IT
TOOK ANY EXCEPTION TO THE REQUIREMENTS OF THE INVITATION. AS TO THE
APPLICABILITY OF CERTAIN CLAUSES TO A CANADIAN BIDDER, WE NOTE THAT THE
PROCUREMENT ACTIVITY ADVISED YOU ON OCTOBER 20, 1965, OF THE REASONS WHY
THE SPECIFIC CLAUSES OF THE INVITATION ARE NOT APPLICABLE IN THE CASE OF
A FOREIGN CONTRACTOR PERFORMING A GOVERNMENT CONTRACT OUTSIDE OF THE
UNITED STATES. THE FACT THAT A FOREIGN BIDDER CANNOT COMPLY WITH SUCH
INAPPLICABLE CLAUSES DOES NOT RENDER ITS BID NONRESPONSIVE SINCE ITS
OBLIGATIONS TO PERFORM ARE NOT SUBJECT TO THE CLAUSES MENTIONED BY YOU.
WE, THEREFORE, AGREE WITH THE PROCUREMENT ACTIVITY AS TO THE
RESPONSIVENESS OF THE CANADIAN VICKERS' BID. ADDITIONALLY, WE FIND
NOTHING IN THE PERTINENT PROVISIONS OF SECTION VI OF ASPR WHICH WOULD
PRECLUDE AN AWARD OF A CONTRACT FOR A LISTED MILITARY END ITEM TO A
PRIVATE CANADIAN FIRM SUBMITTING THE LOWEST RESPONSIVE BID.
WE ARE INFORMED BY THE PROCUREMENT ACTIVITY THAT THE END ITEMS
INVOLVED WILL BE USED IN THE PERFORMANCE OF TESTS UNDER LABORATORY
CONDITIONS AND, IF DESTROYED, WILL NOT BE REPLACED. MORE PARTICULARLY,
THE ITEMS TO BE SUPPLIED ARE CHAMBERS REQUIRED FOR TEST AND EXPERIMENTAL
PURPOSES. ITEM 1 IS A SIMPLIFIED SCALE MODEL OF AN ATTACK-TYPE
SUBMARINE AND WILL BE USED IN A STUDY OF NOISE AND VIBRATION EMANATING
FROM THE MAJOR STRUCTURAL COMPONENTS AND NOISE CREATED IN THE WATER
DIRECTLY ATTRIBUTABLE TO THE VELOCITY OF THE ITEM. ITEM 2, WHICH IS A
MODEL OF THE STERN PORTION OF A SUBMARINE, IS TO BE USED AS A TEST
VEHICLE IN WHICH CERTAIN EQUIPMENT WILL BE INSTALLED FOR WEAPON IMPACT
TESTS AND FOR HIGH EXPLOSIVE TESTS. GOVERNMENT-OWNED SIMULATED
EQUIPMENT SUCH AS HYDRAULIC SYSTEM, SHAFT, SHAFT BEARING, HYDRAULIC
GEAR, ETC., WILL BE INSTALLED IN THE VEHICLE AT THE CONTRACTOR'S PLANT.
AFTER DELIVERY OF THE ITEM, THE GOVERNMENT WILL INSTALL CERTAIN
INSTRUMENTATION IN THE VEHICLE TO RECORD THE RESULTS OF THE TESTS. ITEM
3 WILL BE USED PRIMARILY FOR TESTING STRENGTH OF WELDS.
ASPR 6-103.5 PROVIDES IN PERTINENT PART AS FOLLOWS:
"/A) LISTED. THE SECRETARIES OF THE DEPARTMENTS HAVE DETERMINED THAT
IT WOULD BE INCONSISTENT WITH THE PUBLIC INTEREST TO APPLY THE
RESTRICTIONS OF THE BUY AMERICAN ACT WITH RESPECT TO CERTAIN SUPPLIES,
WHICH HAVE BEEN DETERMINED TO BE OF A MILITARY CHARACTER OR INVOLVED IN
PROGRAMS OF MUTUAL INTEREST TO THE UNITED STATES AND CANADA, WHERE SUCH
SUPPLIES ARE MINED, PRODUCED, OR MANUFACTURED IN CANADA AND EITHER (I)
ARE CANADIAN END PRODUCTS OFFERED BY THE LOWEST ACCEPTABLE BID OR
PROPOSAL OR (II) ARE INCORPORATED IN END PRODUCTS MANUFACTURED IN THE
UNITED STATES. EACH DEPARTMENT MAINTAINS A LIST OF THESE SUPPLIES,
WHICH IS APPROVED BY THE SECRETARY CONCERNED. (THE DEPARTMENTAL LISTS
PROVIDE THAT PARTS AND EQUIPMENT FOR LISTED SUPPLIES ARE CONSIDERED TO
BE INCLUDED IN THE LISTS, EVEN THOUGH NOT SEPARATELY LISTED, WHEN THEY
ARE PROCURED UNDER A CONTRACT THAT ALSO CALLS FOR LISTED SUPPLIES.)
"/C) APPLICATION OF CANADIAN EXCEPTION. THE EFFECT OF (A) AND (B)
ABOVE MAY BE SUMMARIZED AS FOLLOWS.
"/2) LISTED CANADIAN END PRODUCTS ARE TREATED AS DOMESTIC SOURCE END
PRODUCTS AND NEITHER DUTY NOR THE EVALUATION FACTORS PRESCRIBED BY
6-104.4 SHALL BE USED FOR EVALUATION.'
THE END ITEMS INVOLVED HERE WERE DETERMINED TO BE CANADIAN LABORATORY
EQUIPMENT CONTAINED IN THE LIST APPEARING IN NAVY PROCUREMENT DIRECTIVES
6-103.5. SINCE THIS DETERMINATION WAS BASED UPON TECHNICAL
CONSIDERATIONS, WE OBVIOUSLY ARE NOT IN A POSITION TO QUESTION SUCH
JUDGMENT. THAT BEING THE CASE, THE ADVERTISED END ITEMS CONSTITUTE
LISTED CANADIAN PRODUCTS WHICH ARE REQUIRED TO BE TREATED AS DOMESTIC
SOURCE END ITEMS; AND, UNDER ASPR 6-103.5 (C) (2), NEITHER DUTY NOR THE
USUAL BUY AMERICAN ACT BID EVALUATION FACTORS ARE FOR CONSIDERATION.
CONCERNING THE USE OF THE DUTY-FREE CLAUSE, YOUR ATTENTION IS INVITED
TO ASPR 6-605.1 (A) WHEREIN THE POLICY GOVERNING THE DUTY-FREE ENTRY OF
CANADIAN SUPPLIES IS STATED AS FOLLOWS:
"/A) IN KEEPING WITH THE POLICY TO ENHANCE ECONOMIC COOPERATION WITH
CANADA IN THE INTERESTS OF CONTINENTAL DEFENSE (6-504), DUTY-FREE ENTRY
SHOULD GENERALLY BE ACCORDED CANADIAN SUPPLIES THAT CONSTITUTE, OR THAT
ARE DIRECTLY OR INDIRECTLY INCORPORATED IN, END ITEMS INCLUDED IN THE
DEPARTMENTAL LISTS OF SUPPLIES MAINTAINED PURSUANT TO 6-103.5 (A).
(THESE DEPARTMENTAL LISTS INCLUDE SUPPLIES OF A MILITARY CHARACTER OR
WHICH ARE INVOLVED IN PROGRAMS OF MUTUAL INTEREST TO THE UNITED STATES
AND CANADA. * * * DUTY-FREE ENTRY SHOULD BE ACCORDED SUCH SUPPLIES BY
THE ISSUANCE OF DUTY-FREE ENTRY CERTIFICATES IN ACCORDANCE WITH THIS
PARAGRAPH 6-605 AND, IN PARTICULAR, AS PROVIDED IN THE CONTRACT CLAUSE
PRESCRIBED IN 6-605.2.'
THIS PROVISION, WHEN READ IN THE LIGHT OF ASPR 6-103.5, CLEARLY
CONTEMPLATES THE FREE ENTRY OF LISTED CANADIAN PRODUCTS FURNISHED BY A
CANADIAN SUPPLIER; HENCE, NO REQUIREMENT EXISTS FOR THE APPLICATION OF
A DUTY EVALUATION FACTOR IN THIS SITUATION.
ACCORDINGLY, WE FIND NO LEGAL BASIS TO QUESTION CONSIDERATION OF THE
BID OF CANADIAN VICKERS UNDER THE SUBJECT INVITATION.
B-156429, NOV. 23, 1965
TO SOUTHERN PACIFIC COMPANY:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 24, 1965, YOUR FILE
YM 85-112003, IN WHICH YOU REQUESTED REVIEW OF OUR SETTLEMENT
DISALLOWING YOUR CLAIM FOR ADDITIONAL FREIGHT CHARGES FOR TRANSPORTATION
SERVICES FURNISHED UNDER GOVERNMENT BILL OF LADING AT 4009939, DATED
OCTOBER 17, 1962.
UPON REVIEW OF THE MATTER WE HAVE CONCLUDED THAT THE TRANSIT
APPLICABLE IS NOT APPLICABLE TO THE SHIPMENT IN QUESTION. AN ADDITIONAL
ALLOWANCE WILL BE MADE ON THE BASIS OF THE RATES APPLICABLE TO AND FROM
THE TRANSIT POINT. YOU WILL RECEIVE NOTICE OF THE REVISED CHARGE BASIS
IN DUE COURSE.
B-156816, NOV. 23, 1965
TO MICROLAB/FXR:
BY LETTER DATED MAY 12, 1965, AS SUPPLEMENTED BY LETTER OF OCTOBER
19, 1965, YOU PROTESTED AGAINST THE PROCEDURES FOLLOWED BY THE BUREAU OF
SHIPS, DEPARTMENT OF THE NAVY, IN CONNECTION WITH
YOUR TECHNICAL PROPOSAL SUBMITTED UNDER THE FIRST STEP OF A TWO-STEP
PROCUREMENT SOLICITED UNDER P.R. 627G1-47555 (Q).
THE REQUEST FOR UNPRICED TECHNICAL PROPOSALS WAS ISSUED ON MAY 27,
1964, FOR A QUANTITY OF R.F. POWER MEASURING SETS, TOGETHER WITH
ATTENUATORS, TECHNICAL MANUALS, MAINTENANCE REPAIR PARTS AND INSTRUMENT
CALIBRATION PROCEDURES. PURSUANT TO ASPR 2-503.1, THE FIRST-STEP
REQUEST FOR TECHNICAL PROPOSALS ADVISED INTERESTED FIRMS OF THE
GOVERNMENT'S REQUIREMENTS BY DESCRIPTIVE INFORMATION AND DATA, TEST DATA
SUBMISSIONS, WEIGHTED FACTORS TO BE USED IN DETERMINING AN OFFEROR'S
TOTAL ENVIRONMENTAL SCORE, AND OF THE GOVERNMENT'S DESIRE FOR
PHOTOGRAPHS, SCHEMATIC DRAWING, TECHNICAL MANUAL, AND QUANTITY CONTROL
PROCEDURES. EXHIBIT "B" OF THE REQUEST FOR PROPOSALS PROVIDED WITH
RESPECT TO BID SAMPLES:
"THE GOVERNMENT MAY, AS A MEANS OF ASSURING THAT THE PRODUCTS OFFERED
MEET THE NEEDS AS SPECIFIED IN THE PROCUREMENT DOCUMENTS, REQUEST A BID
SAMPLE PRIOR TO DETERMINING THE ACCEPTABILITY OF THE OFFEROR'S TECHNICAL
PROPOSAL. EACH BID SAMPLE WILL BE SUBJECT TO ADDITIONAL (GOVERNMENT)
INSPECTIONS AND TESTS, BY A DESIGNATED LABORATORY, AS DEEMED NECESSARY
TO CONFIRM OR DENY CONFORMANCE WITH THE PROCUREMENT REQUIREMENTS AND
OFFERORS CLAIMS. OFFEROR BID SAMPLE MUST MEET DATA REQUIREMENT OF
EXHIBITS "C" AND "D.'
"THE GOVERNMENT WILL EXERCISE CARE AND DILIGENCE TO PREVENT DAMAGE TO
THE SAMPLE AND WILL NOT TEST BEYOND THE CAPABILITIES CLAIMED BY THE
OFFEROR IN HIS SUBMITTED TECHNICAL DATA. THE BID SAMPLES WILL BE
RETURNED TO THE OFFEROR WITHIN ONE (1) MONTH OF CONTRACT AWARD (OR
CANCELLATION) DATE. CONCERNS FAILING TO FURNISH A REQUESTED BID SAMPLE
OF THEIR OWN MANUFACTURER, COMPLETE WITH
SCHEMATIC DIAGRAMS, AND A TECHNICAL MANUAL, TO A DESIGNATED
LABORATORY WITHIN TEN (10) CALENDAR DAYS OF ANY REQUEST FOR SAME WILL BE
ASSUMED NOT TO HAVE AN ADEQUATE PRODUCT FOR THIS PROCUREMENT AND THEIR
TECHNICAL PROPOSAL WILL BE REJECTED WITHOUT FURTHER CONSIDERATION.'
INTERESTED FIRMS WERE ALSO ADVISED THAT TECHNICAL PROPOSALS WOULD BE
EVALUATED IN ACCORDANCE WITH ESTABLISHED CRITERIA TO DETERMINE THE
ACCEPTABILITY OF THE EQUIPMENT OFFERED, AND THAT THE GOVERNMENT RESERVED
THE RIGHT TO DISCUSS TECHNICAL ASPECTS OF THE PROPOSALS SUBMITTED. WITH
REFERENCE TO TEST DATA, OFFERORS WERE REQUIRED TO SUBMIT DATA ON THEIR
EQUIPMENT WHICH WOULD SHOW COMPLIANCE WITH THE TECHNICAL REQUIREMENTS OF
EXHIBIT "C" (TEST DATA). A TECHNICAL PROPOSAL THAT DID NOT PROVE FULL
COMPLIANCE WITH THE TEST DATA REQUIREMENTS WAS NOT TO BE CONSIDERED AS
ACCEPTABLE. ALSO, OFFERORS WERE REQUIRED TO FURNISH TEST DATA TO SHOW
COMPLIANCE, OR THE DEGREE THEREOF, OF THEIR EQUIPMENT WITH THE
ENVIRONMENTAL TEST REQUIREMENTS SET OUT IN EXHIBIT "C" SINCE COMMERCIAL
EQUIPMENT IS NOT ORDINARILY DESIGNED FOR USE UNDER SHIPBOARD
ENVIRONMENTAL CONDITIONS.
SINCE YOU HAVE HAD AN OPPORTUNITY TO REVIEW THE ADMINISTRATIVE BASES
FOR THE REJECTION OF YOUR TECHNICAL PROPOSAL AS SUBMITTED AND AS
SUPPLEMENTED, WE WILL NOT REPEAT HERE THE TECHNICAL REASONS FOR THE
REJECTION OF YOUR TECHNICAL PROPOSAL. WE HAVE, HOWEVER, OBTAINED THE
ADDITIONAL VIEWS OF THE PROCUREMENT AGENCY ON YOUR LETTER OF OCTOBER 19,
1965, TO US, WHEREIN YOU COMMENTED ON THE PROCUREMENT AGENCY REPORT OF
OCTOBER 4, 1965, TO OUR OFFICE ON YOUR PROTEST. IN ORDER THAT YOU MIGHT
BE FULLY APPRISED OF THE AGENCY'S POSITION IN THE MATTER, THERE ARE
QUOTED BELOW ITS RESPONSES TO YOUR OCTOBER 19 LETTER.
"PRIOR TO DEALING IN DETAIL WITH THE VARIOUS CONTENTIONS RAISED IN
MICROLAB/FXR'S LETTER, IT MUST BE BORNE IN MIND THAT THE PRIMARY PURPOSE
OF THIS PROCUREMENT AND THE OTHERS OF THIS BUREAU IS THE ACQUISITION OF
EQUIPMENT MEETING THE OPERATING NEEDS OF THE FLEET. THE PROCEDURES
FOLLOWED IN THIS PROCUREMENT ARE THE SAME AS THOSE OF THE PREVIOUS
PROCUREMENTS WHICH MICROLAB/FXR CITES IN ITS LETTER AS GOOD EXAMPLES OF
PROMOTING COMPETITION. THESE TWO PROCUREMENTS WERE FOR TEST EQUIPMENT (
AN/USM-37 VSWR TEST SETS). BOTH WERE CONDUCTED BY MEANS OF TWO-STEP
FORMAL ADVERTISING, AND BOTH REQUIRED THE SUBMISSION OF TEST DATA TO
ENABLE A DETERMINATION OF THE ACCEPTABILITY OF TECHNICAL PROPOSALS. IN
THE FIRST CASE, THE COMPANY'S PROPOSAL WAS FOUND ACCEPTABLE ON THE BASIS
OF TEST DATA AND A SAMPLE SUBMITTED TO A NAVY LABORATORY, AND THE
COMPANY WAS SUCCESSFUL IN RECEIVING A CONTRACT UNDER THE SECOND STEP.
IN THE SECOND CASE, THE PROPOSAL WAS FOUND ACCEPTABLE AFTER THE COMPANY
WAS ALLOWED TO SUPPLEMENT THE TEST DATA SUBMITTED WITH ITS INITIAL
PROPOSAL BUT CONTRACT AWARD WAS MADE TO HEWLETT-PACKARD ON THE BASIS OF
ITS LOW BID UNDER THE SECOND STEP. THUS, THE DIFFERENCE BETWEEN THESE
TWO PREVIOUS PROCUREMENTS AND THE INSTANT PROCUREMENT APPEARS TO BE ONLY
THAT IN THIS CASE THE BUREAU HAS DETERMINED AFTER REVIEW OF TEST DATA
AND TESTING OF A MODEL THAT MICROLAB/FXR'S PROPOSAL IS UNACCEPTABLE.
"THE FOLLOWING COMMENTS APPLY TO THE CONTENTIONS IN ITS LETTER:
"1. THE LETTER REFERS IN DETAIL TO THE MEETING HELD AT THE BUREAU ON
22 JANUARY 1965. AT THIS TIME BUREAU REPRESENTATIVES POINTED OUT THE
SPECIFIC AREAS IN WHICH THE PROPOSAL WAS CONSIDERED TO BE UNACCEPTABLE,
WITH RESPECT TO BOTH THE ENVIRONMENTAL REQUIREMENTS OF EXHIBIT C AND
ELECTRICAL REQUIREMENTS OF EXHIBIT D. CONCERNING THE FORMER,
MICROLAB/FXR WAS INFORMED THAT THE BUREAU DID NOT AGREE WITH ITS CLAIMED
SCORE OF 98.8 PERCENT SINCE THE WEIGHTED EVALUATION FACTORS IN THE
SOLICITATION HAD BEEN INCORRECTLY APPLIED. AT NO TIME DID BUREAU
REPRESENTATIVES REQUEST THAT MICROLAB/FXR MODIFY ITS DESIGN "SO THAT IT
WOULD REFLECT THE DESIGN APPROACH OF HEWLETT-PACKARD," NOR DID THEY
STATE THAT THE BUREAU'S REQUIREMENTS WOULD BE MODIFIED.
"2. MICROLAB/FXR CONTENDS THAT IT WAS GIVEN A VERY LIMITED TIME FOR
THE DESIGN MODIFICATION AND RETESTING. THE AMENDMENT TO ITS PROPOSAL
WAS DATED 19 MARCH 1965, APPROXIMATELY TWO MONTHS AFTER 22 JANUARY 1965,
AND THE BUREAU BELIEVES THAT THIS INDICATES THAT THE COMPANY WAS
AFFORDED ADEQUATE TIME. THE BUREAU IS NOT AWARE THAT ANY REQUEST WAS
MADE FOR AN EXTENSION OF TIME. THE AMENDED PROPOSAL DID SHOW THAT THE
EQUIPMENT HAD ACHIEVED A SCORE 100 PERCENT IN ACCORDANCE WITH EXHIBIT C.
"3. THE PROTESTANT STATES THAT THE REQUIREMENT FOR ZERO CARRYOVER IS
NOT APPLICABLE TO ITS EQUIPMENT DUE TO THE DESIGN CONCEPT. THE ZERO
CARRYOVER REQUIREMENT IS NECESSARY TO ELIMINATE EXCESSIVE ERRORS IN
MEASUREMENT WHEN THE POWER MEASURING SET IS SWITCHED FROM ONE RANGE TO A
HIGHER RANGE. THIS FEATURE IS NOT PECULIAR TO THE HEWLETT-PACKARD
EQUIPMENT. SPERRY MICROWAVE'S PROPOSAL MET THIS REQUIREMENT. IN WAS
NOT CLEAR FROM MICROLAB/FXR'S PROPOSAL TO WHAT EXTENT ITS PROPOSED
EQUIPMENT CONTAINED THIS FEATURE. THE TEST OF MICROLAB/FXR'S SAMPLE IN
FACT SHOWED THAT EXCESSIVE ERRORS OCCURRED WHEN SWITCHING TO HIGHER
POWER RANGES, AND THIS WAS ONE OF THE FACTORS LEADING TO A DETERMINATION
THAT THE PROPOSED EQUIPMENT WAS NOT STABLE OR ACCURATE ENOUGH TO MEET
BUREAU NEEDS.
"4. MICROLAB/FXR CONTENDS THAT SINCE THE REQUEST FOR SUBMISSION OF A
SAMPLE WAS CONTAINED IN EXHIBIT B, A PRO-FORMA COPY OF THE CONTEMPLATED
IFB WHICH WAS MARKED "FOR INFORMATION ONLY," THIS
REQUIREMENT WAS NOT A PART OF THE SOLICITATION. AS POINTED OUT IN
OUR LETTER OF 4 OCTOBER 1965, THE REQUEST FOR SUBMISSION OF THE SAMPLE
WAS MADE TO AFFORD THE COMPANY AN OPPORTUNITY TO SHOW THAT ITS EQUIPMENT
COULD MEET THE BUREAU'S REQUIREMENTS, AND WAS A REASONABLE ONE.
"5. MICROLAB/FXR INDICATES THAT IT WAS NOT ALLOWED A REASONABLE TIME
TO SUBMIT THE SAMPLE. THE BUREAU'S LETTER OF 19 APRIL 1965 REQUESTED
THAT ONE SAMPLE BE SUBMITTED BY 3 MAY 1965. MICROLAB/FXR'S LETTER OF 26
APRIL 1965 ASKED FOR AN EXTENSION UNTIL 20 MAY 1965 AND SUCH AN
EXTENSION WAS AGREED TO IN THE BUREAU'S REPLY OF 29 APRIL 1965. THE
BUREAU BELIEVES THAT ITS ACTION IN GRANTING THE REQUESTED EXTENSION
EVIDENCES ITS WILLINGNESS TO COOPERATE WITH MICROLAB/FXR, AND
ADDITIONALLY THAT REASONABLE TIME WAS AFFORDED THE COMPANY, PARTICULARLY
IN VIEW OF THE FACT THAT A MODEL OF MICROLAB/FXR'S EQUIPMENT HAD ALREADY
BEEN TESTED FOR PURPOSES OF SUBMITTING THE REQUIRED DATA.
"6. THE COMPANY STATES THAT IT MADE REPEATED REQUESTS TO THE BUREAU
TO BE ALLOWED TO WITNESS AND DISCUSS TESTS CONDUCTED IN ITS EQUIPMENT.
NEITHER THE BUREAU NOR THE NAVAL LABORATORY HAVE ANY RECORD OF ANY
FORMAL REQUEST OF THIS NATURE. ADDITIONALLY, IT IS NOT THE NORMAL
PRACTICE OF THE BUREAU TO ALLOW THE COMPANY TO WITNESS TESTING IN
SIMILAR CIRCUMSTANCES. WHEN THE TESTS INDICATED THAT THE EQUIPMENT
CLEARLY COULD NOT MEET THE NAVY'S REQUIREMENTS, THE COMPANY WAS SO
INFORMED BY THE BUREAU'S LETTER OF 4 OCTOBER 1965.
"IN CONCLUSION, THE BUREAU HAS NO DESIRE TO ELIMINATE MICROLAB/FXR
FROM COMPETING IN FUTURE PROCUREMENTS. HOWEVER, THE COMPANY CANNOT BE
ALLOWED TO COMPETE FURTHER IN THIS PROCUREMENT. THE EVALUATION OF ITS
TECHNICAL PROPOSAL HAS CLEARLY DEMONSTRATED THAT THE EQUIPMENT IT
PROPOSED TO FURNISH IS NOT ACCEPTABLE.'
THE BID SAMPLE REQUIREMENT OF THE REQUEST FOR PROPOSALS CONSTITUTED,
IN OUR OPINION, A PROPER EXERCISE OF PROCUREMENT RESPONSIBILITY AND IS
REASONABLY CONTEMPLATED BY ASPR 2-503.1 (A). WHILE THE BID SAMPLE
PROVISION WAS INCLUDED AS PART OF EXHIBIT "B," THE CONTEMPLATED
INVITATION FOR BIDS, THE LANGUAGE OF THE PROVISION IS CLEARLY APPLICABLE
TO THE FIRST-STEP SOLICITATION FOR TECHNICAL PROPOSALS. SINCE THE BID
SAMPLE PROVISION WAS INCLUDED AS A PART OF THE PROCUREMENT PACKAGE
REQUESTING TECHNICAL PROPOSALS, WE SEE NO REASON FOR CONCLUDING THAT
SUCH PROVISION WAS NOT AN INTEGRAL PART OF THE FIRST-STEP SOLICITATION.
IN THIS CONNECTION, SEE ASPR 2-202.4 (B) WHEREIN IS SET FORTH THE POLICY
THAT BID SAMPLES MAY BE REQUIRED WHERE THE CHARACTERISTICS OF THE
PRODUCT "CANNOT BE DESCRIBED ADEQUATELY IN THE APPLICABLE SPECIFICATION
OR PURCHASE DESCRIPTION, THUS NECESSITATING THE SUBMISSION OF A SAMPLE
TO ASSURE PROCUREMENT OF AN ACCEPTABLE PRODUCT.' IN VIEW OF THE
CONDITIONS PRESCRIBED FOR USE OF TWO-STEP FORMAL ADVERTISING (ASPR 2-502
(A) (, IT WOULD SEEM APPROPRIATE TO PROVIDE FOR SAMPLE SUBMISSION AT THE
OPTION OF THE GOVERNMENT DURING EVALUATION OF TECHNICAL PROPOSALS.
ON REVIEW OF THE RECORD, WE FIND NO BASIS TO QUESTION THE REJECTION
OF YOUR TECHNICAL PROPOSAL OR THE INTENTION OF THE PROCUREMENT AGENCY TO
NEGOTIATE A CONTRACT WITH HEWLETT-PACKARD PURSUANT TO ASPR 2-503.1 (F).
SEE 40 COMP. GEN. 35; ID. 40; B-155433 DATED MAY 21 AND JUNE 17, 1965.
B-157539, NOV. 23, 1965
TO MR. WILBERT J. DAVIS:
THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 7, 1965, APPEALING FROM
OUR DECISION OF SEPTEMBER 3, 1965, AFFIRMING OUR EARLIER SETTLEMENT OF
AUGUST 2, 1965, WHICH DISALLOWED YOUR CLAIM FOR BACK PAY FROM JANUARY 8,
1965, THROUGH MARCH 12, 1965.
AS WE POINTED OUT IN OUR EARLIER LETTER OF SEPTEMBER 3, 1965, THE
BUREAU OF MINES WAS NOT ACTING ARBITRARILY IN PLACING YOU IN A
LEAVE-WITHOUT-PAY STATUS ON JANUARY 8, 1965, SINCE THERE WERE ADEQUATE
MEDICAL FINDINGS TO ESTABLISH THAT YOU WERE UNABLE TO PERFORM YOUR
ASSIGNED DUTIES DURING THAT PERIOD AND YOU HAD NO ANNUAL OR SICK LEAVE
TO YOUR CREDIT. IT FOLLOWS THAT THE ACTION OF THE BUREAU OF MINES NOT
BEING UNJUSTIFIED OR UNWARRANTED WITHIN THE MEANING OF 5 U.S.C. 652 (B)
(1), (2), THERE IS NO BASIS FOR INVOKING PROVISIONS OF THAT SECTION
RESPECTING PAYMENT OF BACK PAY.
IN VIEW OF THE FACT THAT YOUR LETTER INDICATES THAT YOU ARE IN
COMMUNICATION WITH THE PITTSBURGH LAW FIRM OF STRAUSSBURGER AND MCKENNA,
THIS OFFICE WOULD NOT PRESUME TO ADVISE YOU AS TO THE PROCEDURE FOR
ENTERING SUIT IN THIS MATTER. HOWEVER, WE POINT OUT THAT UNDER THE
PROVISIONS OF 28 U.S.C. 1346 AND 1491, THE UNITED STATES DISTRICT COURTS
AND THE UNITED STATES COURT OF CLAIMS (WASHINGTON, D.C.) WOULD APPEAR TO
HAVE JURISDICTION TO ENTERTAIN SUITS OF THE NATURE HERE INVOLVED.
FOR THE REASONS SET FORTH ABOVE THERE IS NO BASIS FOR MODIFYING OUR
DECISION OF SEPTEMBER 3,
B-157774, NOV. 23, 1965
TO MR. WINSTON EDMOND:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 17, 1965,
REQUESTING REVIEW OF OUR SETTLEMENT OF SEPTEMBER 10, 1965, WHICH
DISALLOWED YOUR CLAIM FOR PAY AND ALLOWANCES WHICH YOU BELIEVE TO BE DUE
YOU INCIDENT TO YOUR SERVICE IN THE ARMY IN 1943 AND 1944. AS A BASIS
FOR THE DISALLOWANCE, THE SETTLEMENT CONTAINED A CONSOLIDATED STATEMENT
OF YOUR PAY ACCOUNT FOR THE PERIOD JUNE 1, 1943, TO MAY 6, 1944, SHOWING
NO AMOUNT DUE YOU FOR THE REASON THAT THE TOTAL OF THE CHARGES AGAINST
YOUR PAY ACCOUNT ($591.93) FOR THAT PERIOD EXCEEDED THE TOTAL OF THE
CREDITS ($586.13) BY $5.80. ALSO, WE HAVE RECEIVED YOUR LETTER OF
OCTOBER 31, 1965, IN WHICH YOU SAY THAT YOU WISH TO INSTITUTE A CLAIM
FOR COMPENSATION ON ACCOUNT OF A SERVICE-CONNECTED DISABILITY.
YOU MENTION VARIOUS REASONS WHY YOU CONSIDER THAT YOU COULD NOT HAVE
RECEIVED THE AMOUNTS WHICH YOU BELIEVE YOU SHOULD HAVE BEEN PAID FOR THE
PERIOD INVOLVED. AMONG OTHER THINGS, YOU SAY THAT YOU WERE SENTENCED BY
A SPECIAL COURT-MARTIAL IN MAY 1943 TO BE CONFINED FOR 6 MONTHS AND TO
FORFEIT $33 OF YOUR PAY FOR 6 MONTHS. YOU ALSO SAY, HOWEVER, THAT THE
FINE WAS SUSPENDED AND THAT THE SENTENCE OF CONFINEMENT WAS REDUCED TO
90 DAYS. IN VIEW OF YOUR REPRESENTATIONS, ALL THE PAPERS IN OUR FILE
RELATING TO YOUR CASE HAVE BEEN CAREFULLY REEXAMINED. THAT FILE
CONTAINS A REPORT DATED JANUARY 6, 1948, FROM THE WAR DEPARTMENT, THE
PERTINENT PART OF WHICH READS AS FOLLOWS:
"THE RECORDS FURTHER SHOW THAT HE WAS TRIED BY SPECIAL COURT MARTIAL
NUMBER 97, HEADQUARTERS, CAMP CARSON, COLORADO, DATED 11 JUNE 1943 FOR
THE VIOLATION OF THE 96TH ARTICLE OF WAR: (1) OPERATE VEHICLE IN EXCESS
OF SPEED LIMIT (2) ON DUTY IN IMPROPER UNIFORM (3) WRONGFULLY TAKE AND
USE AUTO OF A VALUE OF $50.00; SENTENCED TO BE CONFINED AT HARD LABOR
FOR THREE MONTHS AND TO FORFEIT $15.00 OF HIS PAY PER MONTH FOR SIX
MONTHS; SENTENCE, APPROVED 15 JUNE 1943; RELEASED FROM CONFINEMENT 18
AUGUST 1943.'
THE FILE ALSO CONTAINS YOUR LETTER OF JULY 15, 1947, IN WHICH YOU
INDICATED THAT YOU HAD BEEN PAID TO INCLUDE MAY 31, 1943. YOU STATED IN
THAT LETTER THAT THE DEDUCTIONS CHARGEABLE AGAINST YOUR PAY FOR THE
PERIOD IN QUESTION INCLUDED A $90 FINE ASSESSED AGAINST YOU DURING THE
MONTH OF JUNE 1943. ON THE BASIS OF SUCH RECORDS, WE FIND NO REASON FOR
CONCLUDING THAT YOU WERE NOT PROPERLY CHARGEABLE WITH THE FORFEITURE OF
$15 PER MONTH FOR THE 6-MONTH PERIOD.
SINCE YOU HAVE ALLEGED GENERALLY THAT YOU WERE NOT PAID AS YOU SHOULD
HAVE BEEN PAID DURING SUCH PERIOD, IT IS TO BE NOTED THAT YOUR MONTHLY
BASE PAY AS A PRIVATE WAS $50 AND THAT YOUR PAY ACCOUNT FOR THE ENTIRE
PERIOD INVOLVED WAS CHARGEABLE WITH A MONTHLY DEDUCTION OF $27 AS YOUR
CONTRIBUTION TO THE FAMILY ALLOWANCE PAID YOUR DEPENDENTS AND WITH A
MONTHLY DEDUCTION OF $6.60 FOR YOUR CLASS N ALLOTMENT (NATIONAL SERVICE
LIFE INSURANCE). AFTER MAKING SUCH DEDUCTIONS, THERE REMAINED ONLY
$16.40 OF YOUR MONTHLY BASE PAY. THERE IS SET FORTH BELOW A DETAILED
STATEMENT OF THE AMOUNTS WHICH YOU WERE PAID FOR THE VARIOUS PAY PERIODS
AND THE REASONS WHY YOU WERE SO PAID.
YOUR PAY ACCOUNT FOR THE MONTHS OF JUNE, JULY, AND AUGUST 1943 WAS
COVERED BY VOUCHER NO. 6777, SEPTEMBER 1943 ACCOUNTS OF LIEUTENANT
COLONEL A. J. WORCOTT, FORT FRANCIS E. WARREN, WYOMING, AND YOU WERE
PAID ON THAT VOUCHER A CASH PAYMENT OF $4.20, AS THE NET AMOUNT PAYABLE
OUT OF THE $150 DUE YOU FOR SUCH 3-MONTH PERIOD. THE DEDUCTIONS MADE ON
THAT VOUCHER INCLUDED A DEDUCTION OF $45 (3 MONTHS AT $15 PER MONTH)
PURSUANT TO THE COURT-MARTIAL ORDER OF JUNE 15, 1943, $81 FAMILY
ALLOWANCE DEDUCTION, AND $19.80 CLASS N ALLOTMENT.
YOUR PAY ACCOUNT FOR THE MONTH OF SEPTEMBER 1943 WAS COVERED BY
VOUCHER NO. 9477, OCTOBER 1943 ACCOUNTS OF COLONEL WORCOTT. YOU WERE
PAID ON THAT VOUCHER A CASH PAYMENT OF $15.40, AS THE NET AMOUNT DUE YOU
FOR THAT MONTH, AFTER DEDUCTIONS OF $6.60 CLASS N ALLOTMENT, $27 FAMILY
ALLOWANCE AND $1 LAUNDRY. NO DEDUCTION WAS MADE ON THAT VOUCHER
PURSUANT TO THE COURT-MARTIAL ORDER OF JUNE 15, 1943.
YOUR PAY ACCOUNT FOR THE PERIOD OCTOBER 1, 1943, THROUGH FEBRUARY 29,
1944, WAS COVERED BY VOUCHER NO. 23640, MARCH 1944 ACCOUNTS OF
LIEUTENANT COLONEL E. J. BERRY, CAMP CARSON, COLORADO, AND YOU WERE
PAID ON THAT VOUCHER A CASH PAYMENT OF $3.56, AS THE NET AMOUNT PAYABLE
OUT OF THE $250 DUE YOU FOR THAT 5-MONTH PERIOD. A DEDUCTION OF $45 (3
MONTHS AT $15 PER MONTH) WAS MADE ON THAT VOUCHER PURSUANT TO THE
COURT-MARTIAL ORDER OF JUNE 15, 1943. IN ADDITION TO DEDUCTIONS OF
$135, $33, $3.64 AND $4.80 FOR FAMILY ALLOWANCE, CLASS N ALLOTMENT,
GOVERNMENT PROPERTY LOST OR DAMAGED, AND LAUNDRY, RESPECTIVELY, SUCH
VOUCHER ALSO SHOWED DEDUCTIONS TO COVER FOUR PARTIAL PAYMENTS MADE TO
YOU AT FORT FRANCIS E. WARREN IN AMOUNTS AS FOLLOWS: $19, $5, $5, AND
$5.
A STATEMENT OF YOUR PAY ACCOUNT FOR THE PERIOD MARCH 1 TO MAY 6,
1944, BASED ON THE INFORMATION SHOWN ON VOUCHER NO. 3369, JUNE 1944
ACCOUNTS OF FIRST LIEUTENANT J. F. ANTWILER, JR., CAMP CARSON,
COLORADO, IS AS FOLLOWS:
CHART
CREDITS BASE PAY AS A PRIVATE, MARCH 1 TO MAY 6, 1944, AT
PER MONTH $ 110.00 COMMUTED RATIONS
$0.67 PER DAY 26.13 $ 136.13
DEBITS CLASS N ALLOTMENT (NATIONAL SERVICE LIFE INSURANCE
MARCH THROUGH MAY 1944, AT $6.60 PER MONTH
ALLOWANCE DEDUCTIONS (CLASS F) MARCH THROUGH MAY 1944, AT $27 PER MO
GOVERNMENT PROPERTY LOST OR DAMAGED 5.44 POST LAUN
1.00 PARTIAL PAYMENT FOR APRIL 1944 ON VOUCHER NO. 29616,
COLONEL E. J. BERRY, CAMP CARSON, COLORADO 15.00
ON VOUCHER NO. 3369 19.6
------------- ---------- AMOUNT OF OVERPAYMENT
$ 5.80
ALL THE ITEMS SHOWN IN THE CONSOLIDATED STATEMENT OF ACCOUNT
CONTAINED IN THE SETTLEMENT OF SEPTEMBER 10, 1965, ARE BASED UPON
INFORMATION FURNISHED US FROM THE OFFICIAL RECORDS OF THE DEPARTMENT OF
THE ARMY. WE FIND NO BASIS FOR A CONCLUSION THAT ANY OF THE ITEMS IN
THAT STATEMENT OF ACCOUNT ARE NOT CORRECTLY SHOWN OR THAT ANY ADDITIONAL
AMOUNT IS DUE YOU IN CONNECTION WITH YOUR ARMY SERVICE.
ACCORDINGLY, UPON REVIEW, THE SETTLEMENT OF SEPTEMBER 10, 1965, IS
SUSTAINED.
YOUR LETTER OF OCTOBER 31, 1965, IS BEING TRANSMITTED BY LETTER OF
TODAY, B-15774, COPY HEREWITH, TO THE HONORABLE W. J. DRIVER,
ADMINISTRATOR, VETERANS ADMINISTRATION, WASHINGTON, D.C., 20420,
INASMUCH AS IT APPEARS THAT THE MATTER INVOLVED IS WITHIN THE EXCLUSIVE
JURISDICTION OF THE VETERANS ADMINISTRATION. ANY FURTHER CORRESPONDENCE
CONCERNING THE MATTER SHOULD BE ADDRESSED TO THE ADMINISTRATOR OF
VETERANS AFFAIRS.
B-157860, NOV. 23, 1965
TO MR. RAYMOND H. FELDMEIER:
YOUR LETTER OF SEPTEMBER 28, 1965, TO THE PRESIDENT HAS BEEN REFERRED
TO OUR OFFICE FOR HANDLING AS AN APPEAL FROM THE DENIAL OF YOUR CLAIM
FOR BACK PAY FOR THE PERIOD FROM MARCH 19, 1959, TO JANUARY 23, 1961, BY
OUR CLAIMS DIVISION SETTLEMENT OF SEPTEMBER 15, 1965, TO YOU.
THE RECORD INDICATES THAT YOU RESIGNED ON MARCH 19, 1959, BECAUSE OF
PHYSICAL DISABILITY AND THAT YOU WERE AGAIN HIRED BY THE POST OFFICE
DEPARTMENT IN JANUARY 1961 WHEN YOUR PHYSICAL CONDITION IMPROVED.
THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACT OF JUNE 10, 1948, 5
U.S.C. 652, PROVIDES FOR BACK PAY IN CERTAIN CASES OF UNJUSTIFIED
REMOVAL. IN ORDER TO COME UNDER THE PROVISIONS OF THIS ACT IT IS
NECESSARY TO SHOW THAT THE EMPLOYEE WAS RESTORED TO DUTY AS A RESULT OF
A DETERMINATION THAT HIS REMOVAL WAS UNJUSTIFIED. A RESIGNATION CANNOT
BE EQUATED WITH A REMOVAL FOR CAUSE UNLESS THE RESIGNATION IS PROCURED
BY FRAUD OR DURESS. AN EMPLOYEE WHO FEELS THAT HIS RESIGNATION WAS
FORCED AND THAT HIS REMOVAL WAS THEREFORE UNJUSTIFIED MUST SEEK
RESTORATION TO HIS FORMER POSITION THROUGH TIMELY APPEAL TO HIS AGENCY
OR TO THE CIVIL SERVICE COMMISSION. IF RESTORATION IS DIRECTED BY HIS
AGENCY OR THE CIVIL SERVICE COMMISSION ON THE GROUND OF UNJUSTIFIED
REMOVAL THEN CONSIDERATION MAY BE GIVEN TO HIS ENTITLEMENT TO BACK PAY
UNDER THE ABOVE-CITED ACT. THERE APPEARS TO BE NO OTHER PROVISION OF
LAW UNDER WHICH YOUR CLAIM MIGHT BE ALLOWED.
YOUR REAPPOINTMENT TO THE POSTAL SERVICE WAS MADE BECAUSE OF YOUR
IMPROVED PHYSICAL CONDITION RATHER THAN AS A RESULT OF A DETERMINATION
THAT YOUR ORIGINAL SEPARATION WAS UNJUSTIFIED. YOUR CASE, THEREFORE,
DOES NOT MEET THE REQUIREMENTS OF THE ACT.
FOR THE ABOVE REASONS THE SETTLEMENT OF OUR CLAIMS DIVISION
DISALLOWING YOUR CLAIM MUST BE AND IS SUSTAINED.
B-157913, NOV. 23, 1965
TO CAPTAIN PAUL E. ROMANO:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 9, 1965, IN
EFFECT REQUESTING REVIEW OF THE SETTLEMENT OF JULY 8, 1965, WHICH
DISALLOWED YOUR CLAIM FOR ADDITIONAL MILEAGE AND PAY FOR PERSONAL TRAVEL
AND REIMBURSEMENT FOR DEPENDENT'S TRAVEL INCIDENT TO YOUR RELEASE FROM
ACTIVE DUTY.
YOU WERE RELEASED FROM ACTIVE DUTY AT FORT HAMILTON, NEW YORK, BY
PARAGRAPH 41, SPECIAL ORDERS NO. 148, DATED MAY 27, 1964. THE ORDERS
STATED THAT YOUR HOME OF RECORD IS PELHAM MANOR, NEW YORK, AND THAT YOU
WERE ORDERED TO ACTIVE DUTY FROM PELHAM MANOR, NEW YORK. UPON YOUR
RELEASE YOU AND YOUR DEPENDENTS TRAVELLED FROM NEW YORK, NEW YORK, TO
BETHESDA, MARYLAND, AND YOU WERE PAID FOR YOUR TRAVEL AND FOR TRAVEL OF
YOUR DEPENDENTS NOT TO EXCEED THE DISTANCE FROM NEW YORK, NEW YORK, TO
PELHAM MANOR, NEW YORK. SUBSEQUENTLY, BY PARAGRAPH 12, SPECIAL ORDERS
NO. 203, DATED JULY 21, 1964, THE ORDERS OF MAY 27, 1964, WERE AMENDED
TO SHOW ALBANY, NEW YORK, AS THE PLACE FROM WHICH ORDERED TO ACTIVE
DUTY. ON THE BASIS OF SUCH AMENDMENT YOU CLAIMED ADDITIONAL TRAVEL
ALLOWANCES FOR YOURSELF AND DEPENDENTS NOT TO EXCEED THE DISTANCE FROM
NEW YORK, NEW YORK, TO ALBANY, NEW YORK. YOUR CLAIM WAS DISALLOWED FOR
THE REASON THAT A REPORT FROM THE ADJUTANT GENERAL'S OFFICE, ST. LOUIS,
MISSOURI, SHOWS BOTH YOUR HOME OF RECORD AT TIME OF ENTRY AND PLACE OF
ENTRY INTO THE SERVICE AS PELHAM MANOR, NEW YORK. THIS INFORMATION WAS
FURNISHED BY THE ADJUTANT GENERAL'S OFFICE IN RESPONSE TO A REQUEST BY
THE FINANCE CENTER DATED APRIL 26, 1965. IN
YOUR PRESENT LETTER YOU CONTEND THAT THE RECORDS OF THE ADJUTANT
GENERAL'S OFFICE ARE IN ERROR; THAT YOUR PLACE OF ENTRY ON ACTIVE DUTY
WAS ALBANY, NEW YORK, AND THAT YOU CAN FURNISH COPIES OF YOUR ORDERS TO
ACTIVE DUTY AND SUBSEQUENT MOVEMENT ORDERS TO PROVE THIS.
THE TRANSPORTATION AND TRAVEL ALLOWANCES OF MEMBERS OF THE ARMED
SERVICES AND THEIR DEPENDENTS UPON PERMANENT CHANGE OF STATION INCLUDING
THE CHANGE FROM LAST STATION TO HOME ARE GOVERNED BY THE JOINT TRAVEL
REGULATIONS PROMULGATED BY THE SECRETARIES PURSUANT TO 37 U.S.C. 404 AND
406. PARAGRAPH M7009 OF THE REGULATIONS PROVIDES THAT UPON THE MEMBER'S
RELEASE FROM ACTIVE DUTY HE IS ENTITLED TO TRANSPORTATION OR
REIMBURSEMENT FOR TRAVEL PERFORMED BY QUALIFIED DEPENDENTS FROM LAST
STATION TO PLACE OF RESIDENCE NOT TO EXCEED TO THE PLACE SELECTED BY
THE MEMBER FOR HIS TRAVEL ALLOWANCE UNDER PARAGRAPH M4157 OF THE
REGULATIONS. PARAGRAPH M4157 PROVIDES FOR TRAVEL ALLOWANCE FOR THE
MEMBER FROM LAST STATION TO HOME OF RECORD OR PLACE FROM WHICH HE WAS
ORDERED TO ACTIVE DUTY, AS HE MAY ELECT. PARAGRAPH M1150-3A OF THE
REGULATIONS PROVIDES THAT THE TERM "HOME OF RECORD" MEANS THE PLACE
RECORDED AS THE HOME OF THE INDIVIDUAL WHEN COMMISSIONED, REINSTATED,
APPOINTED, REAPPOINTED, ENLISTED, REENLISTED, INDUCTED, OR ORDERED TO
THE RELEVANT TOUR OF ACTIVE DUTY AND THAT TRAVEL AND TRANSPORTATION
ALLOWANCES WILL BE BASED ON THE OFFICIALLY CORRECTED RECORDING IN THOSE
INSTANCES WHEN, THROUGH A BONA FIDE ERROR, THE PLACE ORIGINALLY NAMED AT
TIME OF CURRENT ENTRY WAS NOT IN FACT THE ACTUAL HOME. WHILE THAT
REGULATION RELATES TO HOME OF RECORD, A SIMILAR RULE IS FOR APPLICATION
WITH RESPECT TO THE PLACE RECORDED AS PLACE OF ENTRY ON ACTIVE DUTY OR
FROM WHICH ORDERED TO ACTIVE DUTY. FURTHER IT LONG HAS BEEN THE RULE
THAT IN CASE OF DISPUTE BETWEEN A CLAIMANT AND THE ADMINISTRATIVE OFFICE
AS TO THE FACTS, WE WILL ACCEPT THE ADMINISTRATIVE REPORT IN THE ABSENCE
OF EVIDENCE ESTABLISHING IT TO BE ERRONEOUS.
IN VIEW OF THE REPORT FROM THE ADJUTANT GENERAL'S OFFICE THAT YOU
ENTERED ACTIVE DUTY AT PELHAM MANOR, NEW YORK, AND IN THE ABSENCE OF
EVIDENCE ESTABLISHING SUCH REPORT TO BE ERRONEOUS WE HAVE NO ALTERNATIVE
BUT TO ACCEPT SUCH REPORT AS CORRECT.
MOREOVER, IT IS WELL ESTABLISHED THAT TRAVEL AND TRANSPORTATION
RIGHTS BECOME FIXED WHEN ORDERS ARE ISSUED AND TRAVEL THEREUNDER IS
PERFORMED, AND THAT EXCEPT TO CORRECT AN OBVIOUS ERROR ORDERS MAY NOT BE
AMENDED RETROACTIVELY TO INCREASE OR DECREASE THE GOVERNMENT'S
OBLIGATION. 23 COMP. GEN. 713; 24 ID. 439. SINCE THE AMENDATORY
ORDERS OF JULY 21, 1964, WERE ISSUED AFTER THE TRAVEL WAS PERFORMED AND
IT IS NOW SHOWN THAT THEY CORRECTED AN OBVIOUS ERROR THEY MAY NOT BE
ACCEPTED AS
ESTABLISHING THAT YOU WERE ORDERED TO ACTIVE DUTY FROM ALBANY, NEW
YORK.
ACCORDINGLY, ON THE PRESENT RECORD THE SETTLEMENT OF JULY 8, 1965,
WAS CORRECT AND IS SUSTAINED. HOWEVER, THE MATTER WILL BE GIVEN FURTHER
CONSIDERATION IF YOU ARE ABLE TO FURNISH A COPY OF YOUR ORDERS TO THE
PERTINENT TOUR OF ACTIVE DUTY SHOWING THAT YOU WERE ORDERED TO ACTIVE
DUTY FROM ALBANY, NEW YORK.
B-157960, NOV. 23, 1965
TO THE HONORABLE JAMES L. HARRISON, PUBLIC PRINTER:
REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 1, 1965, WITH
ENCLOSURES, REQUESTING A DECISION AS TO WHETHER PURCHASE ORDER NO.
46397, ISSUED OCTOBER 22, 1965, TO ARNOLD BUSINESS FORMS COMPANY MAY BE
CANCELED BECAUSE OF AN ALLEGED ERROR IN THE COMPANY'S BID ON WHICH AN
AWARD AND THE PURCHASE ORDER WERE BASED.
ON OCTOBER 12, 1965, THE GOVERNMENT PRINTING OFFICE ADVERTISED FOR
PRICES ON THE PRODUCTION OF 2,500,000 4-PART SINGLE STUB, CARBON
INTERLEAVED SETS OF FORMS, SIZE 8 BY 10 1/2 INCHES, PLUS 1/2 TO 3/4 INCH
STUB, AS PER SPECIFICATIONS, WITH ALL SUPPLIES AND SERVICES TO BE
FURNISHED BY THE CONTRACTOR AND COMPLETE SHIPMENT TO BE MADE ON OR
BEFORE DECEMBER 17, 1965.
YOU REPORT THAT THERE WERE FIVE BIDS RECEIVED FOR THIS PROCUREMENT
RANGING IN PRICE FROM A LOW OF $39,425 FROM ARNOLD BUSINESS FORMS
COMPANY, TO A HIGH OF $46,250 FROM DUPLEX PRODUCTS, INCORPORATED. THE
SECOND LOW BID OF $44,200 WAS SUBMITTED BY MCGREGOR PRINTING
CORPORATION.
AWARD WAS MADE ON OCTOBER 22, 1965, TO ARNOLD BUSINESS FORMS COMPANY
AS THE LOW BIDDER AND PURCHASE ORDER NO. 46397 CALLING FOR 2,500,000
SETS OF FORMS FOR A TOTAL COST OF $39,425 WAS ISSUED AND MAILED ON THE
SAME DAY. THEREAFTER, ON OCTOBER 25, 1965, THE CONTRACTING OFFICER
RECEIVED A TELEPHONE CALL FROM MR. WILLIAM ARNOLD OF ARNOLD BUSINESS
FORMS COMPANY ADVISING THAT HE HAD RECEIVED THE PURCHASE ORDER AND HAD
FOUND THAT HE HAD MADE A VERY SERIOUS ERROR IN HIS BID.
ALSO, ARNOLD'S VICE PRESIDENT OF SALES CONFIRMED THE ERROR BY LETTE
DATED OCTOBER 25, 1965, AND REQUESTED TO BE RELIEVED OF THE
RESPONSIBILITY OF FILLING THIS ORDER. HE RETURNED THE PURCHASE ORDER
AND ALL OTHER DOCUMENTS WHICH HAD BEEN FORWARDED TO HIM FOR THE
PERFORMANCE OF THE WORK. IN
EXPLANATION OF ITS ERROR, THE CONTRACTOR HAS EXPLAINED THAT IT DID
NOT INCLUDE ANY BASIC CARBON CHARGE IN ITS BID PRICE AND THAT ONLY ONE
PATTERN HAD BEEN CHARGED WHEN IT SHOULD HAVE CHARGED FOR THREE PATTERNS,
AND THAT THE DIFFERENCE AS A RESULT OF THIS ERROR AMOUNTED TO $10.15 PER
THOUSAND SETS OF FORMS, OR A TOTAL OF $25,375 IN ITS BID. COPIES OF
ESTIMATE SHEETS AND PRICE LISTS SUBMITTED BY THE CONTRACTOR IN THIS
MATTER SHOW HOW THE CONTRACTOR MADE ITS ERROR BY INCLUDING ONLY $2.90
FOR ONE PATTERN CARBON INSTEAD OF THREE AND ALSO SHOW THAT NO CHARGE WAS
MADE FOR THE CARBON, RESULTING IN A DIFFERENTIAL OF $10.15 PER THOUSAND
SETS OF FORMS.
IT IS STATED THAT UPON RECEIVING THE NOTICE OF ERROR FROM ARNOLD
BUSINESS FORMS COMPANY, THE CONTRACTING OFFICER REVIEWED ALL BIDS WHICH
HAD BEEN RECEIVED FOR THIS REQUIREMENT. THIS REVIEW REVEALED THAT A
PREVIOUS PURCHASE FOR A SIMILAR REQUIREMENT HAD BEEN MADE FROM MCGREGOR
PRINTING COMPANY FOR A COST OF $16.74 PER THOUSAND SETS OR A TOTAL OF
$58,220 FOR 3 MILLION SETS. THIS PRICE WAS CONSIDERED FAIR AND
REASONABLE TO PAY FOR THE 4-PART CARBON INTERLEAVED SETS WHICH ARE VERY
SIMILAR TO THOSE ORDERED FROM ARNOLD BUSINESS FORMS COMPANY. THE
CONTRACTING OFFICER REPORTS THAT BECAUSE OF THE PRESSURE OF WORK AT THE
TIME THE INSTANT AWARD WAS MADE HE FAILED TO MAKE A COMPARISON OF PRICES
WITH PAST PROCUREMENTS, AND THAT HE SHOULD HAVE NOTED THAT THE ARNOLD
BID WAS UNUSUALLY LOW FOR THIS REQUIREMENT AND THEREFORE, HE SHOULD HAVE
GIVEN ARNOLD BUSINESS FORMS COMPANY AN OPPORTUNITY TO REVIEW THE
SPECIFICATIONS AND CONFIRM ITS BID PRICE. IN VIEW OF THE FOREGOING, YOU
RECOMMEND THAT YOUR OFFICE BE AUTHORIZED TO CANCEL THE PURCHASE ORDER
WITH ARNOLD BUSINESS FORMS COMPANY AND TO READVERTISE THE PROCUREMENT.
ON THE RECORD, THERE IS NO DOUBT THAT ARNOLD BUSINESS FORMS COMPANY
MADE AN ERROR IN ITS BID, AS ALLEGED, AND THAT THE CONTRACTING OFFICER
SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR IN THE BID AND SHOULD
HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO ITS ACCEPTANCE. HIS
ACCEPTANCE OF THE BID, THEREFORE, DID NOT RESULT IN A VALID AND BINDING
CONTRACT. IN THESE CIRCUMSTANCES, AND SINCE THE CONTRACTOR PROMPTLY
ALLEGED ERROR IN ITS BID UPON RECEIPT OF THE PURCHASE ORDER AND,
FURTHER, SINCE NO WORK HAS BEEN PERFORMED THEREUNDER, WE WILL NOT
OBJECT TO CANCELLATION OF PURCHASE ORDER NO. 46397 AND READVERTISEMENT
OF THE PROCUREMENT. SEE B-143593, DATED JULY 29, 1960, AND B-157281,
DATED AUGUST 2, 1965.
THE PAPERS, EXCEPT THE CORRESPONDENCE PERTAINING TO THE ERROR IN BID,
THE ESTIMATE SHEETS, AND THE PRICE LISTS, ARE RETURNED HEREWITH AS
REQUESTED.
B-128594, NOV. 22, 1965
TO COMMANDER M. L. CONNER, SC, USN, DISBURSING OFFICER, RETIRED PAY
DEPARTMENT, THROUGH COMPTROLLER OF THE NAVY:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 22, 1965, REQUESTING
AN ADVANCE DECISION AS TO THE PROPER BASIS ON WHICH TO COMPUTE THE
RETIRED PAY OF ELMER C. WOODWARD, CSM, USN, RETIRED (134 65 36),
EFFECTIVE FROM DECEMBER 1, 1964. YOUR REQUEST WAS ASSIGNED SUBMISSION
NO. DO-N-868 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE
COMMITTEE.
MR. WOODWARD WAS TRANSFERRED TO THE FLEET NAVAL RESERVE ON OCTOBER
19, 1931, AND RELEASED TO INACTIVE DUTY THAT SAME DATE. HE LATER SERVED
ON ACTIVE DUTY FROM FEBRUARY 26, 1940, TO DECEMBER 14, 1946, INCLUSIVE.
HE WAS PLACED ON THE RETIRED LIST OF THE NAVY EFFECTIVE AUGUST 1, 1940,
FOR PHYSICAL DISABILITY. THUS, EFFECTIVE OCTOBER 1, 1949, HIS RETIRED
PAY STATUS CAME SQUARELY WITHIN THE PURVIEW OF SECTION 411 OF THE CAREER
COMPENSATION ACT OF 1949, CH. 681, 63 STAT. 823.
THE RECORD SHOWS THAT ACTING ON THE BASIS OF CERTAIN INFORMATION
FURNISHED TO HIM BY THE FIELD BRANCH, BUREAU OF SUPPLIES AND ACCOUNTS,
DEPARTMENT OF THE NAVY, IN FIRST ENDORSEMENT TO LETTER DATED OCTOBER 19,
1951, IN WHICH HIS DISABILITY WAS RATED AT "ZERO" PERCENTUM, MR.
WOODWARD ON OCTOBER 22, 1951, ELECTED UNDER SECTION 411 OF THE 1949 LAW
TO RECEIVE RETIREMENT PAY ON A YEARS-OF-SERVICE BASIS. IN ACCORDANCE
WITH THAT ELECTION MR. WOODWARD'S RETIREMENT PAY WAS COMPUTED EFFECTIVE
AS OF OCTOBER 1, 1949, ON THE BASIS OF 57 1/2 PERCENT OF THE MONTHLY
ACTIVE DUTY BASIC PAY OF ENLISTED PAY GRADE E-7, WITH OVER 22 BUT NOT
OVER 26 YEARS OF CREDITABLE SERVICE.
IN SELIGA V. UNITED STATES, 137 CT.CL. 710, DECIDED MARCH 6, 1957, IT
WAS HELD THAT INACTIVE TIME IN THE FLEET NAVAL RESERVE (OR FLEET
RESERVE) COULD BE INCLUDED IN COMPUTING DISABILITY RETIREMENT PAY IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 402 (D) UNDER AN ELECTION OF
OPTION (A) IN SECTION 411 OF THE 1949 LAW. UNDER THE SELIGA RULE, AND
IF HE MET THE REQUIREMENTS PRESCRIBED IN TITLE IV OF THE 1949 LAW, MR.
WOODWARD'S DISABILITY RETIREMENT PAY WOULD HAVE BEEN COMPUTED EFFECTIVE
FROM OCTOBER 1, 1949, ON THE BASIS OF 57 1/2 PERCENT OF THE MONTHLY
ACTIVE DUTY BASIC PAY OF ENLISTED PAY GRADE E-7, WITH OVER 30 YEARS OF
CREDITABLE SERVICE.
MR. WOODWARD'S SUIT FOR INCREASED RETIRED PAY COVERING THE PERIOD
"FROM MAY 1, 1950, UNTIL THE DATE OF JUDGMENT" ADVANCED ON THE SAME
BASIS AS THE SELIGA CASE, WHICH WAS THEN PENDING IN THE COURT OF CLAIMS,
WAS FILED ON MAY 17, 1956, AS PLAINTIFF NO. 34 IN AFLAGUE, ET AL. V.
UNITED STATES, CT.CL. NO. 212-56. SUBSEQUENTLY, UPON THE FILING OF A
MOTION TO DISMISS HIS ACTION AS PLAINTIFF NO. 34 (THE MOTION WAS HELD IN
ESCROW BY THE DEPARTMENT OF JUSTICE), MR. WOODWARD'S SELIGA TYPE CLAIM
THAT HAD BEEN RECEIVED IN THE GENERAL ACCOUNTING OFFICE ON APRIL 30,
1959, FROM HIS ATTORNEYS FOR THE PERIOD "FROM OCTOBER 1, 1949 TO THE
DATE OF SETTLEMENT OF THIS CLAIM" WAS DISALLOWED BY THE CLAIMS DIVISION
OF THIS OFFICE IN SETTLEMENT DATED FEBRUARY 25, 1963, FOR THE REASON
THAT---
"THE BUREAU OF MEDICINE AND SURGERY, DEPARTMENT OF THE NAVY, HAS
CONCLUDED THAT THE DISABILITY FOR WHICH YOU WERE PLACED UPON THE RETIRED
LIST WAS NOT INCURRED WHILE YOU WERE ENTITLED TO RECEIVE ACTIVE DUTY PAY
AS PRESCRIBED IN SECTION 402 (A) AND (B) OF THE CAREER COMPENSATION ACT
OF 1949, 63 STAT. 816.'
THE ISSUE RAISED IN THE DISALLOWANCE OF FEBRUARY 25, 1963, NAMELY,
WHETHER MR. WOODWARD DID NOR DID NOT INCUR THE DISABILITY FOR WHICH HE
WAS PLACED ON THE RETIRED LIST EFFECTIVE AUGUST 1, 1940, WHILE IN
RECEIPT OF ACTIVE DUTY PAY HAS BEEN IN DISPUTE EVER SINCE. THE ACTION
TAKEN IN THE SETTLEMENT OF FEBRUARY 25, 1963, WAS UPHELD BY THIS OFFICE
IN DECISION OF MARCH 28, 1963, B-128594, COPY HEREWITH, ON THE BASIS OF
A REPORT DATED FEBRUARY 14, 1963, FROM THE BUREAU OF MEDICINE AND
SURGERY, DEPARTMENT OF THE NAVY, IN WHICH IT WAS STATED THAT IN THE
OPINION OF THE BUREAU "* * * THE DISABILITY FOR WHICH WOODWARD WAS
RETIRED WAS NOT INCURRED WHILE ENTITLED TO RECEIVE BASIC PAY.'
UPON THE REQUEST OF MR. WOODWARD'S ATTORNEYS FOR RECONSIDERATION OF
THE MATTER, THE DISALLOWANCE OF FEBRUARY 25, 1963, WAS AGAIN UPHELD IN
DECISION OF AUGUST 9, 1963, B-128594, COPY HEREWITH, BY REASON OF THE
SUPPLEMENTAL REPORT DATED JUNE 28, 1963, FROM THE BUREAU OF MEDICINE AND
SURGERY, DEPARTMENT OF THE NAVY, SETTING FORTH IN MORE DETAIL THE FACTS
CONCERNING MR. WOODWARD'S DISABILITY RETIRED STATUS AND CONTAINING THE
EXPRESS STATEMENTS THAT (1) WOODWARD'S ,PHYSICAL DISABILITY WAS NEITHER
INCURRED IN NOR AGGRAVATED BY A PERIOD OF ACTIVE SERVICE BUT RATHER, THE
DEGREE OF DISABILITY AT THE TIME OF * * * RETIREMENT AND RERETIREMENT
WAS DUE TO THE NATURAL PROGRESSION OF A DEVELOPMENTAL DEFECT WHICH IN
FACT EXISTED PRIOR TO * * * ENTRY INTO THE NAVAL SERVICE" AND (2) THAT
IN THE OPINION OF THE BUREAU MR. WOODWARD "* * * DOES NOT QUALIFY FOR
THE BENEFITS OF TITLE 4 (IV) OF THE CAREER COMPENSATION ACT OF 1949.'
ON NOVEMBER 30, 1964, THE DEPARTMENT OF JUSTICE FILED "DEFENDANT'S
ADMISSION OF LIABILITY" IN WHICH IT WAS CONCEDED THAT THE PLAINTIFF, MR.
WOODWARD,"IS ENTITLED, IN ESTABLISHING THE BASIC PAY FACTOR TO BE USED
IN RECOMPUTING HIS RETIRED PAY FROM MAY 1, 1950, TO CREDIT FOR INACTIVE
TIME BETWEEN THE DATE OF TRANSFER TO THE FLEET RESERVE AND RECALL TO
ACTIVE DUTY" CITING THE SELIGA DECISION OF MARCH 6, 1957, AS AUTHORITY
THEREFOR. IN CONNECTION WITH THE ABOVE, THE DEPARTMENT OF JUSTICE, IN A
LETTER DATED JULY 9, 1964, HAD REQUESTED THE DEPARTMENT OF THE NAVY TO
REEXAMINE THE WOODWARD MATTER AND SUBMIT RECOMMENDATIONS REGARDING THE
FILING OF AN ADMISSION OF LIABILITY IN THE CASE. THE DEPARTMENT OF THE
NAVY IN LETTER OF NOVEMBER 9, 1964, REPLIED AS FOLLOWS:
"IN RESPONSE TO YOUR LETTER ADDRESSED TO THE DEPARTMENT OF THE NAVY
DATED 9 JULY 1964, YOU ARE ADVISED THAT THE BUREAU OF MEDICINE AND
SURGERY REMAINS OF THE VIEW THAT WOODWARD'S DISABILITY WAS NEITHER
INCURRED IN NOR AGGRAVATED BY ACTIVE SERVICE IN THE UNITED STATES NAVY.
FOR THIS REASON IT IS IMPOSSIBLE FOR THIS CASE TO BE SETTLED
ADMINISTRATIVELY. IT IS RECOGNIZED, HOWEVER, THAT BY A LETTER DATED 19
OCTOBER 1951, WOODWARD WAS ADVISED THAT HE WAS PLACED ON THE RETIRED
LIST PRIOR TO 1 OCTOBER 1949 BY REASON OF PHYSICAL DISABILITY INCURRED
AS A RESULT OF ACTIVE SERVICE AND THAT BY A LETTER DATED 22 OCTOBER
1951, HE MADE A PROPER ELECTION UNDER SECTION 411 OF THE CAREER
COMPENSATION ACT OF 1949, 63 STAT. 802, 824.'
JUDGMENT WAS ENTERED ON FEBRUARY 12, 1965, IN FAVOR OF MR. WOODWARD
IN THE AMOUNT OF $1,599.67, REPRESENTING INCREASED RETIRED PAY UNDER THE
SELIGA RULE FOR THE PERIOD MAY 1, 1950, TO NOVEMBER 30, 1964, INCLUSIVE.
THE ATTORNEY FOR MR. WOODWARD, BY LETTER OF MARCH 12, 1965, REQUESTED
RECONSIDERATION OF THE SELIGA TYPE CLAIM COVERING THE PERIOD OCTOBER 1,
1949, TO APRIL 30, 1950, INCLUSIVE, AND IN ADDITION IN A LETTER DATED
JULY 26, 1965, THE ATTORNEY FURTHER REQUESTED THAT THIS OFFICE INSTRUCT
THE DEPARTMENT OF THE NAVY TO ADJUST MR. WOODWARD'S RETIRED PAY ON THE
SAME BASIS FOR THE PERIOD SUBSEQUENT TO NOVEMBER 30, 1964, THEREBY
RAISING THE IDENTICAL ISSUE PRESENTED IN YOUR LETTER OF JULY 22, 1965.
IN DECISIONS DATED JUNE 22, 1965, AND SEPTEMBER 21, 1965, B-128594,
COPIES ALSO ENCLOSED, MR. WOODWARD'S CLAIM FOR SELIGA TYPE BENEFITS FOR
THE PERIOD OCTOBER 1, 1949, TO APRIL 30, 1950, INCLUSIVE (BARRED FROM
CONSIDERATION OF THE COURT OF CLAIMS BY THE PROVISIONS OF 28 U.S.C.
2501) WAS DENIED NOTWITHSTANDING THE JUDGMENT ENTERED IN HIS FAVOR ON
FEBRUARY 12, 1965. SEE THE LAST PARAGRAPH BEGINNING ON PAGE 1 OF THE
DECISION OF JUNE 22, 1965, IN WHICH IT IS POINTED OUT THAT THE JUDGMENT
OF FEBRUARY 12, 1965, WHICH IS BASED SOLELY ON AN ADMISSION OF LIABILITY
DOES NOT ESTABLISH ENTITLEMENT TO THE RETIREMENT PAY IN QUESTION FOR ANY
PERIOD OTHER THAN THAT COVERED BY THE JUDGMENT ITSELF (MAY 1, 1950, TO
NOVEMBER 30, 1964, INCLUSIVE). ALSO, NOTE IN PARTICULAR THE PARAGRAPH
ON PAGE 2 OF THE DECISION OF SEPTEMBER 21, 1965, WHERE IT WAS STATED
THAT THE SAME REASONS WHICH BAR ENTITLEMENT TO THE ADJUSTMENT CLAIMED
FOR THE PERIOD CLAIMED OCTOBER 1, 1949, TO APRIL 30, 1950, INCLUSIVE,
ALSO BAR ENTITLEMENT TO A SIMILAR ADJUSTMENT FOR THE PERIOD SUBSEQUENT
TO NOVEMBER 30, 1964. CF. 41 COMP. GEN. 283. YOUR BASIC QUESTION AS TO
WHETHER MR. WOODWARD IS ENTITLED TO RETIRED PAY FROM DECEMBER 1, 1964,
BASED ON OVER 30 YEARS OF CREDITABLE SERVICE FOR BASIC PAY PURPOSES (THE
SELIGA RULE) IS ANSWERED IN THE NEGATIVE.
IN PARAGRAPH 5 OF YOUR LETTER IT IS STATED THAT IN APRIL 1965 YOUR
OFFICE ADJUSTED MR. WOODWARD'S RETIRED PAY RETROACTIVELY TO DECEMBER 1,
1964, ON THE SAME BASIS AS THE AMOUNT HE RECEIVED UNDER THE COURT OF
CLAIMS JUDGMENT OF FEBRUARY 12, 1965, ABOVE REFERRED TO. PARAGRAPH 6 OF
YOUR LETTER DISCLOSES THAT UPON SUBSEQUENTLY RECEIVING INFORMATION
SHOWING THAT THE JUDGMENT OF FEBRUARY 12, 1965, WAS BASED ON AN
ADMISSION OF LIABILITY BY THE GOVERNMENT (DEPARTMENT OF JUSTICE) AS
DISTINGUISHED FROM A JUDGMENT ON THE MERITS, YOUR OFFICE THEN READJUSTED
MR. WOODWARD'S RETIRED PAY EFFECTIVE FROM JUNE 1, 1965, TO EXCLUDE
CREDIT FOR HIS INACTIVE SERVICE IN THE FLEET RESERVE. IT THUS APPEARS
THAT MR. WOODWARD HAS BEEN OVERPAID BY YOUR OFFICE FOR THE PERIOD
DECEMBER 1, 1964, TO MAY 31, 1965, INCLUSIVE.
IN PARAGRAPH 8 OF YOUR LETTER SPECIFIC REFERENCE IS MADE TO DECISION
OF THIS OFFICE DATED SEPTEMBER 3, 1959, 39 COMP. GEN. 152, COUPLED WITH
THE COMMENT THAT UNDER THE HOLDING OF THAT DECISION MR. WOODWARD MAY BE
ENTITLED TO THE BENEFITS OF THE SELIGA RULE. THAT DECISION HELD THAT
THE RE-RETIREMENT CONCEPT AS APPLIED TO RETIRED MEMBERS OF THE UNIFORMED
SERVICES BY THE COURT OF CLAIMS IN BAILEY V. UNITED STATES, 134 CT.CL.
NO. 471 (1956); TRAVIS V. UNITED STATES, 137 CT.CL. 148 (1956); AND
SELIGA V. UNITED STATES, 137 CT.CL. 710 (1957) TO PERMIT ADDITIONAL
RETIRED PAY BASED ON INACTIVE TIME ON A RETIRED LIST OR IN THE FLEET
RESERVE UNDER SECTION 402 (D) OF THE CAREER COMPENSATION ACT OF 1949
WOULD BE FOLLOWED BY THIS OFFICE IN SIMILAR CASES INVOLVING
RE-RETIREMENTS BEFORE OCTOBER 1, 1949 "* * * WHERE THE MEMBERS HAVE
ELECTED TO QUALIFY FOR RETIRED PAY UNDER SECTION 411 OF THE 1949 ACT.'
WE AGREE THAT IF MR. WOODWARD MET THE REQUIREMENT PRESCRIBED IN TITLE
IV OF THE CAREER COMPENSATION ACT OF 1949 ("PHYSICAL DISABILITY INCURRED
WHILE ENTITLED TO RECEIVE BASIC PAY") HE WOULD BE ENTITLED TO THE
BENEFITS OF THE SELIGA RULE. HOWEVER, ON THE RECORD BEFORE THIS OFFICE
MR. WOODWARD DOES NOT MEET SUCH REQUIREMENT AND HENCE HIS RETIRED PAY
STATUS MAY NOT BE VIEWED AS COMING WITHIN THE PURVIEW OF THE DECISION OF
SEPTEMBER 3, 1959.
B-157362, NOV. 22, 1965
TO THE JAMES LEFFEL AND COMPANY:
ON JULY 29, 1965, HEADQUARTERS, DEPARTMENT OF THE ARMY, OFFICE OF THE
CHIEF OF ENGINEERS, FORWARDED YOUR PROTEST TO THE AWARD OF A CONTRACT
UNDER INVITATION FOR BIDS NO. CIVENG-22-052-65-24, TO OUR OFFICE FOR A
DECISION. _SUBSEQUENT TO THIS REQUEST BY THE CORPS OF ENGINEERS YOU
SUBMITTED TO OUR OFFICE CONSIDERABLE ADDITIONAL CORRESPONDENCE IN
CONNECTION WITH YOUR CONTENTION THAT YOUR BID SHOULD BE CONSIDERED
RESPONSIVE TO THE INSTANT INVITATION. IN THIS REGARD WE HAVE YOUR
LETTER OF NOVEMBER 11, 1965, ENCLOSING A REPORT FROM AN INDEPENDENT
ENGINEER WHO HAS REVIEWED THE TECHNICAL ASPECTS OF THIS CASE.
THE ABOVE INVITATION WAS ISSUED ON OCTOBER 19, 1964, BY THE UNITED
STATES ARMY ENGINEER DISTRICT, VICKSBURG, MISSISSIPPI, FOR THE
PROCUREMENT OF A HYDRAULIC TURBINE FOR THE NARROWS DAM AND POWER PLANT
IN ACCORDANCE WITH ATTACHED SPECIFICATIONS. BIDS WERE OPENED ON APRIL
6, 1965, AND THREE BIDS WERE RECEIVED AS FOLLOWS:
TABLE
THE JAMES LAFFEL AND COMPANY $255,805
BALDWIN-LIMA-HAMILTON CORPORATION $310,530
ALLIS-CHALMERS MANUFACTURING COMPANY $388,335
PARAGRAPH 4 OF THE INVITATION'S SCHEDULE ENTITLED "DRAWINGS AND DATA
TO BE SUBMITTED WITH BID" PROVIDED:
"* * * A. EACH BIDDER SHALL SUBMIT WITH HIS BID THE INFORMATION
LISTED BELOW, WHICH WILL BE USED IN DETERMINING THE RESPONSIVENESS OF
THE BID. BIDS WILL BE EVALUATED STRICTLY ON THE BASIS OF INFORMATION
SUBMITTED WITH THE BID. THE DRAWINGS AND DATA SUBMITTED MUST BE IN
SUFFICIENT DETAIL AND CLARITY TO ENABLE MAKING A COMPLETE AND POSITIVE
CHECK WITH THE TECHNICAL PROVISIONS OF THE SPECIFICATIONS AND, WHERE
HEREINAFTER INDICATED, SUCH DATA WILL BE MADE A PART OF THE CONTRACT
INSTRUMENT. IF BIDDERS SUBMIT STANDARD DRAWINGS AND/OR STANDARD
PUBLISHED DESCRIPTIVE DATA OF THEIR PRODUCT, ANY MODIFICATION REQUIRED
AND INTENDED BY THEM IN ORDER TO MEET THE REQUIREMENT OF THE
SPECIFICATIONS SHALL BE CLEARLY SET FORTH BY DESCRIPTION OF THE CHANGE
OR REVISION. FAILURE TO SUBMIT DRAWINGS AND DATA OF SUCH DETAIL AND
CLARITY AS DESCRIBED ABOVE, FAILURE OF SUCH INFORMATION TO INDICATE
COMPLIANCE OF THE BID WITH THE SPECIFICATIONS, OR FAILURE TO SUBMIT ALL
OF THE REQUIRED DATA WILL RESULT IN REJECTION OF THE BID. BIDDERS ARE
CAUTIONED THAT IF A BIDDER IMPOSES A RESTRICTION THAT ANY OF THE
REQUIRED DATA MAY NOT BE PUBLICLY DISCLOSED, SUCH RESTRICTION RENDERS
THE BID NONRESPONSIVE IF IT PROHIBITS THE DISCLOSURE OF INFORMATION TO
PERMIT COMPETING BIDDERS TO KNOW THE ESSENTIAL NATURE AND TYPE OF THE
PRODUCT OFFERED OR TO THOSE ELEMENTS OF THE BID WHICH RELATE TO
QUANTITY, PRICE AND DELIVERY TERMS.
"B. THE DRAWINGS AND DATA SUBMITTED SHALL INCLUDE, AS A MINIMUM, THE
FOLLOWING: * * *"
SUB-PARAGRAPH 2 OF PARAGRAPH 4 PROVIDED FOR "OTHER SPECIFIED DATA.'
IT WAS SPECIFICALLY PROVIDED THAT THIS DATA WOULD BE INCLUDED AS A PART
OF THE CONTRACT INSTRUMENT. SUB-PARAGRAPH (F) OF SUB-PARAGRAPH 2 ON
PAGE 7 OF THE INVITATION REQUIRED THE BIDDER TO SPECIFY THE THROAT
DIAMETER OF THE RUNNER IN INCHES. YOUR INSERTED "79 INCH DIA. * ," AS
YOUR CHARACTERISTIC FOR THIS ITEM. ON THE BOTTOM OF PAGE 7 OF THE
INVITATION YOUR INSERTED: "*SEE LETTER ACCOMPANYING BID.' THE COVER
LETTER ACCOMPANYING YOUR BID, DATED APRIL 3, 1965, STATED AS FOLLOWS ON
PAGE 1:
"IT IS THE INTENTION AND PURPOSE OF THIS BID TO COMPLY IN ALL DETAILS
WITH THE COMPLETE REQUIREMENTS--- TECHNICAL, COMMERCIAL AND OTHERWISE AS
OUTLINED IN YOUR SPECIFICATIONS IN GUIDE TO BIDDERS. IF ANY DEVIATION
OCCURRED IN OUR PROPOSAL IT IS UNINTENTIONAL AND WE RESPECTFULLY REQUEST
THAT YOU CONSIDER THAT WE ARE INTENDING TO CONFORM THROUGHOUT.'
PAGE 2 OF THIS LETTER STATED AS FOLLOWS:
"THE RUNNER OFFERED IN OUR PROPOSAL IS OF THE MOST MODERN TYPE AND
SLIGHTLY DIFFERENT IN DISCHARGE DIAMETER THAN MENTIONED IN YOUR
SPECIFICATIONS. INCIDENTALLY, WITH OUR COMPLETE DEVELOPMENT, IF YOU
WOULD DESIRE THIS TURBINE TO BE MORE OR LESS CAPACITY THAN WE HAVE
INDICATED, WE COULD ARRANGE IT WITHOUT CHANGING THE PRICE.'
PARAGRAPH 2.05 OF THE SPECIFICATIONS OF THE INSTANT INVITATION
PROVIDED AS FOLLOWS:
"2.05. RUNNER. A. THE TURBINE RUNNER SHALL BE OF THE FRANCIS TYPE,
AND SHALL EITHER BE MADE OF CAST STEEL IN ONE PIECE OR SHALL BE MADE OF
A CAST- OR PLATE-STEEL CROWN AND A CAST- OR PLATE-STEEL BAND WITH
CAST-STEEL BUCKETS WELDED TO BOTH CROWN AND BAND. THE RUNNER SHALL BE
DESIGNED AND CONSTRUCTED TO WITHSTAND SAFELY THE STRESSES DUE TO
OPERATION AT RUNAWAY SPEED UNDER CONDITIONS OF MAXIMUM HEAD WITH THE
WICKET GATES AT THE MAXIMUM RUNAWAY POSITION AND WITH NO LOAD ON THE
GENERATOR. THE RUNNER SHALL ALSO BE DESIGNED SO AS TO MINIMIZE
VIBRATION DURING OPERATION.
THE RUNNER SHALL HAVE A THROAT DIAMETER OF NOT LESS THAN 81 INCHES.
IN VIEW OF THE LANGUAGE IN PARAGRAPH 4 OF THE INVITATION, QUOTED
ABOVE, IT IS CLEAR THAT THE DATA WHICH BIDDERS WERE TO FURNISH ON PAGE 7
IS A MATERIAL PART OF THE BID.
THE CORPS OF ENGINEERS DETERMINED THAT YOUR BID TO THE INSTANT
INVITATION WAS NONRESPONSIVE ON THE BASIS THAT YOUR INSERTION OF 79
INCHES AS THE GUARANTEED CHARACTERISTIC OF THE THROAT DIAMETER OF THE
RUNNER DID NOT COMPLY WITH THE REQUIREMENT IN THE SPECIFICATIONS FOR A
RUNNER WITH A THROAT DIAMETER OF 81 INCHES. YOU HAVE PROTESTED THIS
DETERMINATION ALLEGING THAT THE TURBINE MANUFACTURERS RATHER THAN THE
CORPS OF ENGINEERS SHOULD SPECIFY THE THROAT DIAMETER OF THE RUNNER.
YOU ALLEGE THAT THE COVER LETTER SUBMITTED WITH YOUR BID ESTABLISHE
THE RESPONSIVENESS OF YOUR BID. YOU HAVE ALSO BROUGHT TO OUR ATTENTION
YOUR TECHNICAL OBJECTIONS TO THE BID SUBMITTED BY BALDWIN-LIMA-HAMILTON.
WITH RESPECT TO YOUR CONTENTION REGARDING THE REQUIREMENT IN THE
SPECIFICATIONS THAT THE TURBINE RUNNER HAVE A MINIMUM THROAT DIAMETER OF
81 INCHES YOUR LETTER OF OCTOBER 19, 1965, ADVISES OUR OFFICE AS
FOLLOWS:
"4. THERE IS NO JUSTIFICATION FOR OVERRIDING A MANUFACTURER'S
EXPERIENCE WHEN THE TURBINE MUST PRODUCE RESULTS IN POWER, SPEED AND
EFFICIENCY AND UNDER CONTRACT BOND AND ESPECIALLY IS THIS EMPHASIZED
WHEN THE MANFACTURER HAS EXPERIENCE IN UNITS OF THE SAME SIZE AND TYPE
SUCH AS REFERRED TO ABOVE AND MANY OTHERS.
"5. IN VIEW OF THE FOREGOING THERE IS NO CAUSE FOR AN ARBITRARY
DIMENSION OF THE RUNNER OR ANY OTHER PART OF THE TURBINE BEING
SPECIFIED, PARTICULARLY SINCE IT IS OBVIOUS THAT THE U.S. ENGINEERS DO
NOT HAVE TO MAKE THE GUARANTEES OR DO NOT HAVE TO BACK THEM UP OR DO NOT
HAVE TO PUT UP BOND FOR THEIR PERFORMANCE BUT THE TURBINE MANUFACTURER
MUST DO THIS.
"23. THE BASIC PRINCIPLE IS THE OUTPUT AT THE TURBINE COUPLING AND
THAT IS WHAT IS CALLED FOR TO BE PRODUCED. WE HAVE GIVEN BETTER
CAVITATION GUARANTEES. WE HAVE GIVEN BETTER EXPECTED EFFICIENCIES AND
PERFORMANCE OVER THE TOTAL RANGE OF HEADS. WE HAVE GIVEN BETTER
GUARANTEE, VIZ; 1,000 HP MORE THAN THE OTHERS IN THE BID FORM AT FULL
GAGE AND 132 FT. NET HEAD, AND ALL GUARANTEES UNDER BOND.
"24. THE VENTER AREA CONTROLS THE POWER OUTPUT FROM THE RUNNER.
PITTING IS DUE TO BLADE SHAPE.
INLET DIAMETER IS FUNCTION OF SPEED IN REFERENCE TO PEAK EFFICIENCY A
GOOD OPERATING UNIT IS DUE TO DESIGNING OF THE ENTIRE OVERALL
COORDINATED TURBINE AND ALSO COMPLETE DRAFT TUBE IN SOLID COLUMN OF
WATER FOR BEST PERFORMANCE.'
THE REPORT FROM THE INDEPENDENT ENGINEER, WHICH ACCOMPANIED YOUR
LETTER OF NOVEMBER 11, 1965, STATES AS FOLLOWS WITH RESPECT TO THE
MINIMUM THROAT DIAMETER OF THE RUNNER IN THE SPECIFICATIONS:
"IT IS ESSENTIAL TO RECOGNIZE THAT ANY ONE DIMENSION OF A HYDRAULIC
TURBINE IS NOT NECESSARILY THE CONTROLLING DIMENSION BUT THE INLET, THE
RUNNER PASSAGES, THE OUTFLOW AREA AND THE DIAMETER OF THE OUTFLOW ALL
MUST BE CORRELATED FOR ANY GIVEN DESIGN. THIS IS DEPENDENT ENTIRELY ON
THE INDIVIDUAL MANUFACTURER'S PRACTICE AND CAN ONLY BE EVALUATED
PROPERLY IN THE ACTUAL FIELD TESTS OF A COMPLETED PROJECT AS TO WHETHER
HIS SELECTION OF RELATIVE DIMENSIONS OF THE CRITICAL WATER PASSAGES IS
SOUND.'
IT IS THE INDEPENDENT ENGINEER'S POSITION THAT A FIXED DIMENSION FOR
THE RUNNER HAS NO VALIDITY IN ITSELF.
THE POSITION OF THE CORPS OF ENGINEERS REGARDING THE SPECIFYING OF A
MINIMUM THROAT DIAMETER FOR THE RUNNER IS AS FOLLOWS:
"10. THE SPECIFYING OF A MINIMUM THROAT DIAMETER IS NOT RESTRICTIVE.
ALL OF THE TURBINE MANUFACTURERS CAN DESIGN AND MANUFACTURE A TURBINE
TO THE SPECIFIED REQUIREMENTS. THEY CAN ALSO DESIGN AND MANUFACTURE A
RUNNER WITH THE DIAMETER PROPOSED BY JAMES LEFFEL, BUT IT WOULD NOT HAVE
THE SAME CHARACTERISTICS AS THE TURBINE REQUIRED BY THE SPECIFICATIONS.'
IT IS ALSO THE POSITION OF THE CORPS OF ENGINEERS THAT THE MINIMUM
THROAT DIAMETER OF THE RUNNER WAS SPECIFIED FOR REASONS OTHER THAN THOSE
RELATING TO HORSEPOWER AND VELOCITY. WITH RESPECT TO THE REPORT FROM
THE INDEPENDENT ENGINEER WE DO NOT AGREE WITH THE POSITION THAT THE
SPECIFYING OF A FIXED DIMENSION FOR THE DIAMETER OF THE RUNNER SERVES NO
PURPOSE, SINCE THIS REPORT INDICATES THAT THE RUNNER DIAMETER CAN HAVE
AN EFFECT ON THE SPEED OF THE WATER WHEEL. (SEE REFERENCE 13-/B) OF THE
INDEPENDENT ENGINEER'S REPORT). OUR OFFICE HAS CONSISTENTLY HELD THAT
THE DRAFTING OF SPECIFICATIONS TO SATISFY THE NEEDS OF THE GOVERNMENT IS
PRIMARILY THE FUNCTION OF THE PROCURING AGENCY AND THAT WE WILL NOT
QUESTION THIS TYPE OF DETERMINATION UNLESS SHOWN TO BE ARBITRARY OR
CAPRICIOUS. SEE B-151909, NOVEMBER 18, 1963; 38 COMP. GEN. 190 AND
DECISIONS CITED THEREIN. THE QUESTION WHETHER A MINIMUM DIAMETER OF A
RUNNER IN A TURBINE PROCUREMENT SHOULD BE SPECIFIED BY THE GOVERNMENT OR
WHETHER THE TURBINE MANUFACTURER, AFTER CONSIDERING THE OVERALL DESIGN
AND THE PERFORMANCE REQUIRED, COULD BEST DETERMINE THIS CHARACTERISTIC
IS A QUESTION WHICH REQUIRES CONSIDERABLE ENGINEERING EXPERTISE TO
ANSWER. THERE IS A DIFFERENCE OF OPINION ON THIS QUESTION BETWEEN YOU
AND THE CORPS OF ENGINEERS. ON THE BASIS OF THE RECORD PRESENTED WE
CANNOT SAY THAT THE OPINION BY THE CORPS OF ENGINEERS ON THIS QUESTION
IS ARBITRARY OR CAPRICIOUS; CONSEQUENTLY, WE WILL NOT SUBSTITUTE OUR
JUDGMENT ON THIS POINT FOR THAT OF THE CORPS OF ENGINEERS.
THE NEXT QUESTION IS WHETHER YOUR BID COULD BE CONSIDERED ON THE
BASIS THAT YOUR BID OFFERED TO FURNISH A RUNNER WITH A THROAT DIAMETER
OF 81 INCHES, AT NO ADDITIONAL COST, IF THE GOVERNMENT SO DESIRED. IT
IS OUR VIEW THAT THE GENERAL COMPLIANCE OFFER ON PAGE 1 OF YOUR COVER
LETTER, QUOTED, ABOVE, COULD NOT BE CONSIDERED AS OFFSETTING THE
SPECIFIC EXCEPTION TO THE SPECIFICATIONS ON PAGE 7 OF YOUR BID. SEE 36
COMP. GEN. 415; 40 COMP. GEN. 132.
THE QUESTION IS ALSO PRESENTED WHETHER YOUR BID COULD BE CONSIDERED
RESPONSIVE ON THE BASIS OF THE STATEMENT ON PAGE 2 OF THE COVER LETTER
ACCOMPANYING YOUR BID. ARMED SERVICES PROCUREMENT REGULATION 2-301
ENTITLED "RESPONSIVENESS OF BIDS," PROVIDES:
"/A) TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL
RESPECTS WITH THE INVITATION FOR BIDS * * *.'
ARMED SERVICES PROCUREMENT REGULATION 2-404.2 ENTITLED "REJECTION OF
INDIVIDUAL BIDS," ROVIDES:
"/A) ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF
THE INVITATION FOR BIDS SHALL BE REJECTED.'
YOUR BID SPECIFICALLY OFFERED TO FURNISH A TURBINE WITH A RUNNER
HAVING A 79-INCH THROAT DIAMETER AND YOUR COVER LETTER ON PAGE 2 OFFERED
TO FURNISH A TURBINE WITH MORE OR LESS CAPACITY AT NO ADDITIONAL COST TO
THE GOVERNMENT. THE SPECIFICATIONS REQUIRED A TURBINE WITH A RUNNER
HAVING A THROAT DIAMETER OF 81 INCHES. WITH RESPECT TO THE VARIOUS
MEANS BY WHICH THE CAPACITY OF A TURBINE MAY BE CHANGED, THE CORPS OF
ENGINEERS HAS ADVISED OUR OFFICE AS FOLLOWS:
"* * * THE PERFORMANCE OF THE RUNNER CAN BE ALTERED BY INCREASING OR
DECREASING THE ENTRANCE DIAMETER OF THE RUNNER AND BY DECREASING OR
INCREASING THE VENTING BETWEEN BUCKETS WITHOUT INCREASING THE THROAT
DIAMETER OF THE RUNNER * * *.'
THE QUOTE FROM THE CORPS OF ENGINEERS INDICATES THAT THE CAPACITY OF
THE TURBINE CAN BE ALTERED BY THREE DIFFERENT MEANS, THAT IS, BY
CHANGING THE ENTRANCE DIAMETER OF THE RUNNER, WHICH WE ARE ADVISED IS
DIFFERENT FROM THE THROAT DIAMETER OF THE RUNNER, CHANGING THE VENTING
BETWEEN BUCKETS, OR CHANGING THE THROAT DIAMETER OF THE RUNNER. IN
THESE CIRCUMSTANCES WE FIND THAT YOUR OFFER TO FURNISH A TURBINE OF MORE
OR LESS CAPACITY AT NO ADDITIONAL COST IS NOT A SPECIFIC OFFER TO
FURNISH A TURBINE WITH A RUNNER HAVING A THROAT DIAMETER OF 81 INCHES.
CONSEQUENTLY, WE CANNOT CONSIDER THE STATEMENT ON PAGE 2 OF YOUR COVER
LETTER AS A BASIS FOR OFFSETTING THE SPECIFIC EXCEPTION TO THE
SPECIFICATION ON PAGE 7 OF YOUR BID.
WITH RESPECT TO THE MONETARY SAVING WHICH WOULD BE GAINED FROM THE
ACCEPTANCE OF YOUR BID YOU ARE ADVISED THAT IT HAS BEEN THE CONSISTENT
POSITION OF OUR OFFICE THAT THE MAINTENANCE OF THE INTEGRITY OF THE
COMPETITIVE BIDDING SYSTEM IS INFINITELY MORE IN THE PUBLIC INTEREST
THAN A FINANCIAL SAVING IN ANY INDIVIDUAL CASE. SEE 44 COMP. GEN. 495
AND 38 COMP. GEN. 532.
WE HAVE BROUGHT YOUR TECHNICAL OBJECTIONS REGARDING
BALDWIN-LIMA-HAMILTON'S BID TO THE ATTENTION OF THE CORPS OF ENGINEERS.
AFTER REVIEW OF YOUR TECHNICAL OBJECTIONS THE CORPS OF ENGINEERS HAS
ADVISED OUR OFFICE THAT BALDWIN-LIMA-HAMILTON'S BID IS CONSIDERED TO BE
RESPONSIVE.
IN THE CIRCUMSTANCES OF THIS CASE WE FIND NO BASIS TO QUESTION THIS
DETERMINATION BY THE CORPS OF ENGINEERS. SEE B-156679, AUGUST 26, 1965.
B-157369, NOV. 22, 1965
TO BRIGGS AND MORGAN:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1965, WITH
ENCLOSURES, PROTESTING ON BEHALF OF FRED R. COMB, JR., INC., AGAINST THE
AWARD OF A CONTRACT TO A. HEDENBERG AND CO., INC., FOR CONSTRUCTION OF
THE WATER QUALITY STANDARDS RESEARCH LABORATORY AT DULUTH, MINNESOTA,
GENERAL SERVICES ADMINISTRATION PROJECT NO. 21079.
THE PROCUREMENT WAS SET ASIDE FOR THE EXCLUSIVE PARTICIPATION OF
SMALL BUSINESS CONCERNS AND BIDS WERE SOLICITED BY INVITATION DATED JUNE
3, 1965, WHICH SHOWED THE ESTIMATED COST RANGE OF THE PROJECT AS
$1,440,000 TO $1,800,000.
BIDS WERE OPENED AS SCHEDULED ON JULY 15, 1965, AND THE LOW BASE BID
OF $1,876,000 (EXCLUDING ALTERNATES) WAS SUBMITTED BY A. HEDENBERG AND
CO., INC. SUCH BID, HOWEVER, DID NOT INCLUDE A LIST
OF PROPOSED SUBCONTRACTORS AS REQUIRED BY PARAGRAPH 2-08 OF THE
INVITATION'S SPECIAL CONDITIONS. WHILE AN AMENDMENT TO THE BID
INCLUDING THE LIST OF SUBCONTRACTORS WAS SUBSEQUENTLY RECEIVED IN THE
MAILS BY THE GENERAL SERVICES ADMINISTRATION, PUBLIC BUILDINGS SERVICE,
ON JULY 16, 1965, AN INVESTIGATION SHOWED THAT THE AMENDMENT WAS NOT
MAILED IN TIME TO ARRIVE BEFORE BID OPENING AND THE HEDENBERG BID WAS
THEREFORE REJECTED AS NONRESPONSIVE. THE LOW RESPONSIVE BID WAS
SUBMITTED BY FRED R. COMB, JR., INC., IN THE BASE AMOUNT OF $1,998,000.
ALTHOUGH SUCH FIRM WAS DETERMINED TO BE TECHNICALLY QUALIFIED TO PERFORM
THE WORK, ITS BID WAS CONSIDERED TO BE TOO HIGH IN RELATION TO THE FUNDS
AVAILABLE FOR THE PROJECT TO PERMIT COMPLETION THEREOF WITHIN THE LIMITS
OF THE APPROPRIATION CONCERNED. THE GENERAL SERVICES ADMINISTRATION
THEREAFTER CONCLUDED THAT ALL BIDS SHOULD BE REJECTED AND YOUR CLIENT
WAS ADVISED OF SUCH DECISION BY TELEGRAMS DATED AUGUST 2 AND 6, 1965.
PURSUANT TO AUTHORITY DELEGATED BY THE COMMISSIONER, PUBLIC BUILDINGS
SERVICE, TO THE ACTING ASSISTANT COMMISSIONER FOR CONSTRUCTION, PUBLIC
BUILDINGS SERVICE, IN GSA ORDER PBS P5450.9 DATED JUNE 22, 1964, AND IN
ACCORDANCE WITH SECTION 302 (C) (2) OF THE FEDERAL PROPERTY AND
ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 377, AS AMENDED, 41 U.S.C.
252 (C) (2), THE ACTING ASSISTANT COMMISSIONER DETERMINED ON AUGUST 6,
1965, THAT THE PUBLIC EXIGENCY WOULD NOT ADMIT OF THE DELAY INCIDENT TO
ADVERTISING AND THAT A LUMP-SUM CONTRACT SHOULD BE NEGOTIATED FOR THE
PROJECT. FACTORS INVOLVED IN SUCH DETERMINATION HAVE BEEN
ADMINISTRATIVELY REPORTED BY THE GSA CENTRAL OFFICE IN WASHINGTON, D.C.,
AS FOLLOWS:
"THE PROJECT IS IN DULUTH, MINNESOTA, AN AREA WHERE SEVERE WINTERS
ARE TO BE EXPECTED. FROZEN GROUND WILL MAKE EXCAVATION DIFFICULT.
SNOWSTORMS AND THE LIKE ARE ALMOST CERTAIN TO REDUCE THE NUMBER OF
WORKING DAYS AND ICY CONDITIONS WILL MAKE THE WORK HAZARDOUS. DELAY
UNTIL WINTER IN BEGINNING THE WORK IS LIKELY TO RESULT IN FURTHER DELAYS
CAUSED BY THE WINTER ITSELF. NOT ONLY WILL THE DIFFICULTIES OF WINTER
WORK RESULT IN A NATURAL AND PROBABLE INCREASE IN BID PRICES BUT THIS
LABORATORY IS URGENTLY NEEDED FOR USE AT THE EARLIEST POSSIBLE DATE. A
DETERMINATION WAS THEREFORE MADE THAT A PUBLIC EXIGENCY EXISTED WITHIN
THE MEANING OF SEC. 302 (C) (2).'
THE SPECIFICATIONS WERE MODIFIED TO REDUCE THE SCOPE OF THE WORK AND
THE REVISED PLANS, TOGETHER WITH INSTRUCTIONS CONCERNING THE
SOLICITATION, WERE ISSUED TO THE MAXIMUM NUMBER OF QUALIFIED SOURCES,
INCLUDING REPRESENTATIVES OF THE FIRMS OF A. HEDENBERG AND CO., INC.,
AND FRED R. COMB, JR., INC., AT A MEETING HELD BY THE CONTRACTING
OFFICER IN DULUTH ON AUGUST 10, 1965. THE PROPOSALS WERE OPENED AS
SCHEDULED ON AUGUST 13 AND THE LOW BASE PRICE OF $1,845,000 (PLUS
APPROVED ALTERNATES OF $77,100) WAS OFFERED BY HEDENBERG, WHEREAS THE
BASE PRICE OFFERED BY THE COMB FIRM WAS $1,954,000 (PLUS $82,000 FOR THE
APPROVED ALTERNATES). AWARD WAS MADE TO HEDENBERG BY LETTER FROM THE
CONTRACTING OFFICER DATED AUGUST 17, 1965.
YOU STATE THAT THE BASIS FOR YOUR OBJECTION IS SET FORTH IN YOUR
LETTER OF AUGUST 25, 1965, TO THE ACTING COMMISSIONER, PUBLIC BUILDINGS
SERVICE. IN THAT LETTER YOU EXPRESSED VIEWS TO THE EFFECT THAT (1) THE
EXCEPTIONS SET FORTH IN SUBSECTION (E) OF 41 U.S.C. 252, TO THE
REQUIREMENTS FOR ADVERTISING (SECTION 253) DO NOT INCLUDE PARAGRAPH (2)
OF SUBSECTION (C) WHICH CONCERNS PUBLIC EXIGENCY; (2) THE AWARD DOES
NOT COMPLY WITH ANY APPLICABLE LAW OR REGULATION; (3) THE PROCEDURE IN
THIS INSTANCE RESULTED IN A CONTRACT THAT HAD BEEN REDUCED IN SCOPE BUT
INCREASED IN PRICE BY APPROXIMATELY $75,000; AND (4) THE PRACTICAL AND
INTENDED RESULT OF THE PROCEDURE USED HERE IN BID-SHOPPING. YOU ALSO
EXPRESS THE OPINION THAT HERE THE "COMMISSIONER" OF GSA DID NOT MAKE ANY
DETERMINATIONS UNDER 41 U.S.C. 252, AND THAT THE FACT THAT GSA THOUGH
THE LOW RESPONSIVE BID WAS TOO HIGH PROVIDES NO PROPER JUSTIFICATION FOR
THE ACTIONS TAKEN IN THIS CASE.
AT THE OUTSET, IT SHOULD BE NOTED THAT THE IFB SPECIFICALLY PROVIDES
UNDER PARAGRAPH 10 (B) OF THE INSTRUCTIONS TO BIDDERS THAT THE
GOVERNMENT MAY, WHEN IN ITS INTEREST, REJECT ANY OR ALL BIDS.
SUCH PROVISION IS IN ACCORD WITH SUBSECTION (B) OF THE 41 U.S.C 253
(REFERENCED IN YOUR LETTER OF AUGUST 25 TO GSA) WHICH ALSO PROVIDES, IN
PERTINENT PART, THAT "ALL BIDS MAY BE REJECTED WHEN THE AGENCY HEAD
DETERMINES THAT IT IS IN THE PUBLIC INTEREST SO TO DO.' AS YOU HAVE BEEN
PREVIOUSLY ADVISED BY GSA, THAT AGENCY IS PRECLUDED BY THE PROVISIONS OF
41 U.S.C. 12 FROM ENTERING INTO A CONTRACT FOR THE ERECTION OF A PUBLIC
BUILDING WHEN SUFFICIENT FUNDS THEREFOR HAVE NOT BEEN APPROPRIATED. THE
GENERAL SERVICES ADMINISTRATION HAS REPORTED THAT IN A CONTRACT FOR THE
CONSTRUCTION OF A PUBLIC BUILDING IT MUST RETAIN CERTAIN SET ASIDES FROM
THE APPROPRIATED FUNDS TO COVER CONTINGENCIES AND OTHER EXPENSES WHICH
ARE RELATED TO THE CONTRACT AND THAT ACCEPTANCE OF YOUR BID IN RESPONSE
TO THE JUNE 3 INVITATION WOULD NOT HAVE PERMITTED COMPLETION OF THE
PROJECT WITHIN THE ALLOCATED FUNDS. CLEARLY NO BASIS IS PROVIDED FOR
QUESTIONING A DETERMINATION TO REJECT ALL BIDS WHERE, AS IN THE PRESENT
SITUATION, IT IS BASED ON A LACK OF SUFFICIENT FUNDS TO COVER THE
CONTRACT IF AWARDED TO THE LOW RESPONSIVE BIDDER, AND WHERE SUCH A
CONTRACT IS PROHIBITED BY LAW.
IT SHOULD ALSO BE NOTED THAT UNDER 41 U.S.C. 259 (A) THE TERM "AGENCY
HEAD" AS USED THROUGHOUT CHAPTER 4 (PROCUREMENT PROCEDURES) OF TITLE 41
IS NOT RESTRICTED IN MEANING TO THE HEAD OR ANY ASSISTANT HEAD OF ANY
EXECUTIVE AGENCY BUT MAY IN THE CASE OF THE GENERAL SERVICES
ADMINISTRATION, AND AT THE OPTION OF THE ADMINISTRATOR, INCLUDE THE
CHIEF OFFICIAL OF ANY PRINCIPAL ORGANIZATIONAL UNIT. EXCEPT AS LIMITED
BY SECTION 257 (B) OF THAT TITLE, ADMINISTRATIVE
DETERMINATIONS AND DECISIONS SUCH AS THOSE INVOLVED UNDER SECTION 252
(C) MAY BE DELEGATED BY AN AGENCY HEAD TO ANY OTHER OFFICER OR OFFICIAL
OF THE AGENCY. WITH REFERENCE TO THE DETERMINATION OF PUBLIC EXIGENCY
WHICH WAS MADE BY THE ACTING ASSISTANT COMMISSIONER FOR CONSTRUCTION,
PBS, PURSUANT TO APPROPRIATELY DELEGATED AUTHORITY (GSA ORDER PBS
P5450.9), AND TO YOUR CONTENTION THAT PARAGRAPH (2) OF 41 U.S.C. 252 (C)
IS NOT INCLUDED IN THE PARAGRAPHS WHICH ARE ENUMERATED IN SUBSECTION (E)
AS "/1/-/3), (10/-/12), OR (14)," YOU ARE INFORMED THAT THE DASH AS
SHOWN BETWEEN THE NUMBER (1) AND (3) IS USED AS THE EQUIVALENT OF THE
WORDS "TO AND INCLUDING" AND THEREFORE ENCOMPASSES PARAGRAPH NUMBER (2).
SEE THE DEFINITIONS OF THE NOUN "DASH" IN WEBSTER'S THIRD NEW
INTERNATIONAL DICTIONARY AND THE PUNCTUATION SECTION THEREIN AT PAGE
50A, PARAGRAPH 7.7. FURTHER,
SECTION 302 (E) OF THE BASIC LAW, THE FEDERAL PROPERTY AND
ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, SHOWS PARAGRAPH "/2)"
IN A LISTING OF EACH OF THE INDIVIDUAL PARAGRAPHS INVOLVED.
WHILE THE FEDERAL PROCUREMENT REGULATIONS CONTEMPLATE THAT WRITTEN OR
ORAL DISCUSSIONS GENERALLY SHALL BE CONDUCTED WITH THE RESPONSIBLE
OFFERORS, SUCH ACTION IS NOT REQUIRED UNDER PARAGRAPH 1-3.805-1 OF THE
REGULATIONS WHERE IT WOULD BE INAPPROPRIATE OR IN PROCUREMENTS IN WHICH
IT CAN BE DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION 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 THAT AWARD MAY BE MADE WITHOUT
DISCUSSION AND THAT PROPOSALS SHOULD BE SUBMITTED INITIALLY ON THE MOST
FAVORABLE TERMS. ALTHOUGH SUCH A NOTICE WAS NOT CONTAINED IN THE
REVISED SOLICITATION HANDED TO THE INTERESTED PARTIES AT THE CONTRACTING
OFFICER'S MEETING ON AUGUST 10, IT WOULD APPEAR THAT YOU WERE PLACED ON
NOTICE BY THE CONTRACTING OFFICER'S TELEGRAM OF AUGUST 6 THAT
NEGOTIATIONS MIGHT NOT BE CONDUCTED. BUT IF NEGOTIATIONS WERE CONDUCTED
THE OPPORTUNITY TO NEGOTIATE WOULD BE AFFORDED ALL OFFERORS. IN THIS
CONNECTION IT IS NOTED THAT IN YOUR TELEGRAM OF AUGUST 6 TO THE
ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, YOU SPECIFICALLY
OBJECTED TO THAT AGENCY NEGOTIATING WITH ANY "BIDDER" PRIOR TO THE
CONTRACT AWARD ON THE MODIFIED PLANS AND SPECIFICATIONS. SUCH OBJECTION
WAS REITERATED IN YOUR LETTER OF AUGUST 13 ENCLOSING YOUR PROPOSAL. WE
HAVE BEEN INFORMALLY ADVISED BY GSA THAT NO FURTHER DISCUSSIONS WERE
HELD WITH ANY OF THE OFFERORS PRIOR TO THE AWARD AND THAT FURTHER
DISCUSSION WAS CONSIDERED INAPPROPRIATE UNDER THE PARTICULAR
CIRCUMSTANCES INVOLVED. WE FIND NO BASIS ON WHICH TO CONCLUDE THAT
FURTHER DISCUSSION WOULD HAVE BEEN BENEFICIAL TO THE GOVERNMENT OR
WOULD HAVE AFFECTED THE RELATIVE STANDINGS OF THE OFFERORS. IT
APPEARS THAT A COMPETITIVE PRICE RANGE FOR THE PROJECT AS ORIGINALLY
SPECIFIED IN THE IFB OF JUNE 3 WAS REASONABLY ESTABLISHED BY THE BIDS
SUBMITTED IN RESPONSE THERETO. THE MINOR REVISIONS IN THE PROJECT,
WHICH WERE DESIGNED TO EFFECT A CONTRACT WITHIN THE LIMITS OF AVAILABLE
FUNDS, WERE DISCUSSED WITH THE OFFERORS AT THE MEETING OF AUGUST 10, AND
RESULTED IN A REDUCTION BY ALL OFFERORS OF THEIR PRICES THAT WERE BID
UNDER THE ORIGINAL SPECIFICATIONS AND IN THE AWARD OF A CONTRACT FOR
LESS THAN A CONTRACT CONTAINING THE APPROVED ALTERNATES COULD HAVE BEEN
MADE UNDER THE PRICES BID PURSUANT TO THE FIRST SOLICITATION.
HEDENBERG'S NEW BASE PRICE OF $1,845,000 WAS $81,000 LESS THAN ITS
ORIGINAL BASE BID AND COMB'S NEW BASE PRICE OF $1,947,000 WAS $51,000
LESS THAN ITS ORIGINAL BASE BID.
CONCERNING YOUR VIEW THAT PROPER JUSTIFICATION IS NOT PROVIDED FOR
REJECTING ALL BIDS WHERE THE PROCURING AGENCY DETERMINES THAT THE
ACCEPTABLE BIDS ARE TOO HIGH, AUTHORITY FOR SUCH ACTIONS IS PROVIDED BY
41 U.S.C. 252 (C) (14) WHICH STATES IN PERTINENT PART THAT CONTRACTS MAY
BE NEGOTIATED BY THE AGENCY HEAD WITHOUT ADVERTISING IF FOR PROPERTY OR
SERVICES AS TO WHICH THE AGENCY HEAD DETERMINES THAT BID PRICES AFTER
ADVERTISING THEREFOR ARE NOT REASONABLE EITHER AS TO ALL OR AS TO SOME
PART OF THE REQUIREMENTS. SEE FPR 1-3.214 IN CONNECTION WITH THE
APPLICATIONS AND LIMITATIONS REGARDING SUCH AUTHORITY.
CONTRARY TO YOUR CONTENTION, WE FIND NOTHING IN THE FOREGOING
CIRCUMSTANCES WHICH INDICATES THAT THE AWARD WAS THE RESULT OF
"BID-SHOPPING," NOR DO WE PERCEIVE ANY IMPROPRIETY IN THE SITUATION
PRESENTED WHICH WOULD NEGATE THE APPARENT VALIDITY OF THE AWARD MADE TO
A. HEDENBERG AND CO., INC., AND REQUIRE CANCELLATION OF THE CONTRACT.
B-157515, NOV. 22, 1965
TO STUDIO ONE, CREATIVE ART AND DESIGN:
THIS REFERS TO YOUR LETTER OF AUGUST 17, 1965, WITH ENCLOSURES,
PROTESTING AGAINST THE REJECTION OF YOUR PROPOSAL UNDER REQUEST FOR
PROPOSAL NO. 65-2282-235, ISSUED AT THE AIR FORCE SPECIAL WEAPONS
CENTER, KIRTLAND AIR FORCE BASE, NEW MEXICO.
THE RFP CALLS FOR THE PREPARATION OF AN ESTIMATED CONTRACT
REQUIREMENT FOR 11,000 PAGES OF INSTRUCTIONS AND TECHNICAL ORDERS
COVERING THE HANDLING, LOADING AND DELIVERY OF NUCLEAR WEAPONS. THE
CONTRACTOR WILL BE REQUIRED TO ESTABLISH AND MAINTAIN A COMPLETE
ENGINEERING AND TECHNICAL WRITING CAPABILITY IN ALBUQUERQUE, NEW MEXICO,
WHERE THE CONTRACT IS TO BE PERFORMED. HE WILL ALSO BE REQUIRED TO
MAINTAIN A CURRENT TECHNICAL REFERENCE LIBRARY CONSISTING OF EXISTING
NUCLEAR WEAPON T.O.-S, AIRCRAFT T.O.-S, AND OTHER PERTINENT SOURCE DATA.
A ONE-YEAR CONTRACT IS PROPOSED,
WITH A GOVERNMENT OPTION TO EXTEND FOR TWO ADDITIONAL ONE-YEAR
PERIODS, THE RFP FURTHER PROVIDES THAT CALLS FOR THE REQUIRED WORK WILL
NOT BE ISSUED UNTIL 60 DAYS AFTER AWARD OF CONTRACT, AND THAT DURING THE
60-DAY PERIOD THE CONTRACTOR MUST CONDUCT AND COMPLETE A TRAINING
PROGRAM TO PREPARE ITS EMPLOYEES FOR THE CONTRACT WORK.
THE CONTRACTOR WAS REQUIRED TO DETAIL THE TRAINING PROGRAM THAT HE
WOULD CONDUCT DURING THE FIRST 60 DAYS OF THE CONTRACT, INCLUDING
INFORMATION AS TO HIS WRITING AND QUALITY CONTROL STAFF. A BRIEF
STATEMENT WAS REQUIRED OF THE CONTRACTOR'S EXPERIENCE IN WORKING WITH
NUCLEAR WEAPON T.O.-S, MISSILE SYSTEM FLIGHT MANUALS, MAINTENANCE
MANUALS OR AEROSPACE GROUND EQUIPMENT, AND SAMPLE PAGES OF SUCH WORK
WERE TO BE INCLUDED. THE RFP STATED THAT: "TO QUALIFY, THE CONTRACTOR
MUST HAVE HAD AT LEAST ONE YEAR OF EXPERIENCE IN THE PRODUCTION OF
DEPARTMENT OF DEFENSE TECHNICAL ORDERS AND MUST HAVE AN EXISTING
OPERATING TECHNICAL ORDER PRODUCTION FACILITY.' THE CONTRACTOR WAS ALSO
REQUIRED TO DESCRIBE THE WORK FORCE THAT HE WOULD ASSIGN TO THE
CONTRACT. IN THIS CONNECTION, THE RFP STATED:
"ALTHOUGH IT IS NOT MANDATORY THAT ALL EMPLOYEES BE PRESENTLY
EMPLOYED BY THE CONTRACTOR, IT IS MANDATORY THAT A NUCLEUS OF QUALIFIED
PEOPLE BE ALREADY EMPLOYED. IT IS NOT MANDATORY THAT ALL KEY PERSONS
POSSESS DEGREES IN ENGINEERING, ART, AND ENGLISH. IT IS MANDATORY
HOWEVER, THAT ONE GRADUATE ENGINEER AND ONE GRADUATE ENGLISH MAJOR BE
EMPLOYED FULLTIME UNDER THIS CONTRACT. SPECIFY THE EDUCATION AND
EXPERIENCE OF PRESENT EMPLOYEES WHO WILL BE UTILIZED UNDER THIS
CONTRACT. * * *"
IN ADDITION, THE CONTRACTOR WAS ASKED TO EXPLAIN HOW HE PROPOSED TO
PROCESS THE WORK, FROM THE DEFINITION OF REQUIREMENTS AS STATED IN THE
SPECIFICATIONS THROUGH NEGATIVE PRODUCTION.
ON JUNE 1, 1965, PROPOSALS WERE RECEIVED FROM SIX FIRMS, TWO FROM
LARGE BUSINESS AND FOUR FROM SMALL BUSINESS. THE TWO PROPOSALS FROM
LARGE BUSINESS WERE CONSIDERED ACCEPTABLE WHILE THE FOUR FROM SMALL
BUSINESS WERE NOT. HOWEVER, THE THREE LOWEST ESTIMATED COSTS (BASED ON
THE ESTIMATED QUANTITIES) WERE SUBMITTED BY THE SMALL BUSINESS FIRMS,
AND, IN AN EFFORT TO INCREASE THE NUMBER OF ACCEPTABLE TECHNICAL
PROPOSALS, THE AIR FORCE ISSUED ON JULY 7, 1965, A MODIFICATION TO THE
RFP AMPLIFYING PARTS OF THE ORIGINAL RFP. EACH OF THE 6 PROPOSERS WAS
AFFORDED THE OPPORTUNITY TO AMEND ITS PROPOSAL BY JULY 19, 1965. THE
MODIFICATION SPELLED OUT IN GREATER DETAIL THE REQUIREMENTS OF THE
CONTRACT. IT WAS EXPLAINED THAT THE SUCCESSFUL CONTRACTOR MUST HAVE THE
ENGINEERING AND TECHNICAL WRITING ABILITY TO PREPARE AIR FORCE T.O.'S
FROM THE BRIEFEST POSSIBLE INSTRUCTIONS. REFERENCE WAS MADE TO THE NEED
TO SELECT A CONTRACTOR CAPABLE OF PERFORMING IN ACCORDANCE WITH THE HIGH
STANDARDS NECESSARY. THE ESTIMATED REQUIREMENTS WERE SET FORTH IN
DETAIL.
PROPOSERS WERE AGAIN ASKED TO FURNISH THE NAMES OF THEIR KEY
PERSONNEL, GIVING COMPLETE RESUMES OF EDUCATION AND EXPERIENCE.
INFORMATION WAS AGAIN REQUESTED AS TO THE PROPOSED 60-DAY TRAINING
PERIOD AND THE PROPOSERS' FACILITIES, INCLUDING LOCATION, FLOOR SPACE,
STORAGE AREA AND LIST OF SPECIALIZED EQUIPMENT. A LIST OF SUPPLIERS WAS
TO BE FURNISHED. FINALLY, PROPOSERS WERE ASKED TO DESCRIBE THEIR
PRODUCTION PLANS IN DETAIL.
REVISED PROPOSALS WERE RECEIVED BY JULY 19, 1965. THE SIX PROPOSALS
WERE EVALUATED IN TERMS OF COST AS FOLLOWS:
TABLE
ADVANCED CYBERNETICS CORPORATION (AVC) $143,735
STUDIO ONE $226,908
CANNON AND SULLIVAN $229,241
HAYES INTERNATIONAL CORPORATION $226,243
GENGE INDUSTRIES $291,910
MARTIN-MARIETTA CORPORATION $348,554
HAYES AND MARTIN ARE THE TWO LARGE BUSINESS CONCERNS. DESPITE THE
SUBMISSION OF REVISED PROPOSALS FROM AVC, STUDIO ONE AND GENGE
INDUSTRIES (CANNON AND SULLIVAN DID NOT SUBMIT A REVISED PROPOSAL), AIR
FORCE STILL FINDS THAT ONLY HAYES AND MARTIN HAVE SUBMITTED ACCEPTABLE
PROPOSALS. THE DEPARTMENT PROPOSES TO MAKE THE AWARD TO HAYES.
THE CONTRACTING OFFICER NOTIFIED YOU THAT YOUR PROPOSAL WAS JUDGED
NONRESPONSIVE FOR THE FOLLOWING REASONS: LACK OF REQUIRED EXPERIENCE,
FAILURE TO QUALIFY IN EXPERIENCE AS REQUIRED BY THE RFP, QUALIFICATIONS
OF PROPOSED PERSONNEL FAILED TO MEET REQUIREMENTS IN THE RFP, AND
UNACCEPTABILITY OF PROPOSED TRAINING PROGRAM. THESE FINDINGS WERE MADE
BY TECHNICAL EVALUATORS OF THE AIR FORCE WEAPONS LABORATORY (WLAW).
THEY FOUND THAT YOUR EXPERIENCE AS SET FORTH IN YOUR PROPOSAL CONSISTED
OF PRODUCTION TYPE (TYPING AND PRINTING) CONTRACTS BUT NOT WRITING AND
ENGINEERING TYPE CONTRACTS. THEY FOUND THAT YOUR PROPOSAL DID NOT
DETAIL AN ACCEPTABLE TRAINING PROGRAM BUT MERELY CONTAINED GENERAL
STATEMENTS OF INTENTIONS, OF LITTLE OR NO VALUE TO THE GOVERNMENT. NO
INDICATION WAS FOUND THAT YOUR PROPOSED TO EMPLOY A GRADUATE ENGINEER.
ALSO, YOU DID NOT INDICATE THAT YOU WOULD PROVIDE THE REQUIRED TECHNICAL
EDIT IN YOUR PROPOSED PRODUCTION SEQUENCE.
THE CONTRACTING OFFICER ADVISED THAT THE SELECTION OF A MARGINAL
CONTRACTOR, MUCH LESS AN UNQUALIFIED CONTRACTOR, WOULD BE EXTREMELY
HAZARDOUS FOR THIS PROCUREMENT, AS THE REQUIRED T.O.'S WILL COVER THE
HANDLING, LOADING, TRANSPORTATION AND DELIVERY OF NUCLEAR WEAPONS, WHERE
ACCURACY AND CLARITY OF PRESENTATION WILL BE ESSENTIAL.
WE FIND NO BASIS TO QUESTION AIR FORCE'S DETERMINATION TO MAKE THE
AWARD TO HAYES. FOR THIS CONTRACT THE GOVERNMENT MUST SELECT A HIGHLY
QUALIFIED CONTRACTOR. IN CHOOSING SUCH A CONTRACTOR, THE GOVERNMENT
MUST DETERMINE WHICH PROPOSER IS BEST QUALIFIED TO PERFORM THE CONTRACT,
PRICE AND OTHER FACTORS CONSIDERED. SEE ASPR 3-805.1 (D). EFFORTS WERE
MADE BY AIR FORCE TO SOLICIT AS MUCH INFORMATION AS POSSIBLE FROM EACH
OF THE PROPOSERS. YOUR TECHNICAL PROPOSAL WAS EVALUATED TWICE.
ALTHOUGH YOU HAVE QUOTED LOWER PRICES THAN HAYES, THE CONTRACTING
OFFICER FINDS THAT YOUR FIRM DOES NOT HAVE THE EXPERIENCE, KEY PERSONNEL
AND FACILITIES OFFERED BY HAYES. FURTHER, HE FINDS THAT YOUR TECHNICAL
PROPOSAL IS DEFICIENT IN EXPLAINING HOW YOU PROPOSE TO DO THE CONTRACT
WORK. IN HIS JUDGMENT HAYES IS THE MOST QUALIFIED CONTRACTOR FOR THIS
CONTRACT, PRICE AND OTHER FACTORS CONSIDERED. WE CANNOT QUESTION HIS
JUDGMENT IN THIS MATTER.
B-157581, NOV. 22, 1965
TO MR. MAX ISSACSON, PRESIDENT:
FURTHER REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 26, SEPTEMBER 9
AND OCTOBER 29, 1965, PROTESTING AN AWARD TO ANY OTHER BIDDER UNDER
INVITATION FOR BIDS NO. AMC/T/23-204-65-319 UNTIL NEGOTIATIONS WITH
SMALL BUSINESS BIDDERS ARE CONCLUDED OR IN THE ALTERNATIVE THAT THE
INVITATION BE CANCELED AND REISSUED WITH RECOGNITION OF SMALL BUSINESS.
THE INVITATION AS ISSUED JULY 6, 1965, REQUESTED BIDS FOR A DEFINITE
QUANTITY OF 2,685 AND A REQUIREMENTS QUANTITY ESTIMATED AT 3,312 OF
TACHOMETER GENERATORS, GEU-7/A MINIATURE. BY AMENDMENT NO. 1 DATED JULY
30, 1965, THE DEFINITE QUANTITY WAS INCREASED TO 5,432 AND THE ESTIMATED
REQUIREMENTS QUANTITY TO 4,830.
THE ITEM IS A QUALIFIED PRODUCTS LIST (QPL) ITEM AND THE SOLICITATION
REQUIRED QUALIFICATION APPROVAL PRIOR TO BID OPENING DATE. THE
QUALIFIED SUPPLIERS FOR THIS ITEM WERE GENERAL ELECTRIC COMPANY, LEAR
SIEGLER, INCORPORATED (POWER EQUIPMENT DIVISION), BILL JACK INDUSTRIES
AND YOUR COMPANY. BY LETTERS DATED AUGUST 10 AND 12, 1965, THE ACTIVITY
RESPONSIBLE FOR THE LIST, THE UNITED STATES AIR FORCE, APPROVED THE
TRANSFER OF QUALIFICATION APPROVAL OF LEAR SIEGLER, INCORPORATED (POWER
EQUIPMENT DIVISION), TO AIRCRAFT APPLIANCES AND EQUIPMENT, LTD., A
CANADIAN FIRM, AND THE TRANSFER OF APPROVAL OF BILL JACK INDUSTRIES TO
TASK CORPORATION, A CALIFORNIA FIRM.
FOR ALL PRACTICAL PURPOSES THE LATTER FIRMS ARE DEEMED TO SATISFY THE
QPL REQUIREMENTS FOR THE ITEM.
BY BID OPENING DATE OF AUGUST 12, 1965, FOUR BIDS WERE RECEIVED, WITH
ALL BIDDERS OFFERING ONE PRICE FOR THE FIXED AND REQUIREMENTS
QUANTITIES, AS FOLLOWS:
TABLE
CANADIAN COMMERCIAL CORPORATION
(AIRCRAFT APPLIANCES AND EQUIPMENT, LTD.) $22.90
GENERAL ELECTRIC COMPANY 23.23
GLOBE INDUSTRIES, INCORPORATED 23.75
TASK CORPORATION 38.80
THE FIRMS SUBMITTING THE HIGHEST BIDS ARE SMALL BUSINESS CONCERNS
WHILE THE TWO LOWEST BIDS WERE RECEIVED FROM LARGE BUSINESS CONCERNS.
YOUR COMPANY, BY ITS WIRE DATED AUGUST 23, 1965, TO THE CONTRACTING
OFFICER, AND BY LETTER TO THIS OFFICE DATED AUGUST 26, 1965, PROTESTED
AWARD TO ANY OTHER BIDDER, UNTIL NEGOTIATIONS WITH THOSE QUALIFIED SMALL
BUSINESS BIDDERS WERE CONCLUDED. YOUR PROTEST SHOWED THAT IT WAS BASED
UPON TWO PREMISES, THAT THE SOLICITATION SHOULD HAVE BEEN A SMALL
BUSINESS SET-ASIDE AND THAT THE SMALL BUSINESS SIZE STANDARD FOR THE
ITEM SHOULD HAVE BEEN 1,000 RATHER THAN 500 EMPLOYEES. YOUR CONTENTION
WAS THAT, BY INCLUSION OF PARAGRAPH 16 (DEFINITION OF SMALL BUSINESS)
AND PARAGRAPH 17 (SMALL BUSINESS SIZE STANDARD) OF THE ADDITIONAL
INSTRUCTIONS AND CONDITIONS OF THE SOLICITATION, IT WAS INDICATED THE
GOVERNMENT INTENDED TO MAKE THE PROPOSED PROCUREMENT A SMALL BUSINESS
SET-ASIDE. YOU FURTHER CONTENDED THAT THE SMALL BUSINESS STANDARD OF
500 ARBITRARILY EXCLUDED YOUR COMPANY FROM CONSIDERATION AS A SMALL
BUSINESS AND A COPY OF A LETTER FROM THE SMALL BUSINESS ADMINISTRATION
(SBA) WAS ADDED TO YOUR PROTEST FILE STATING THAT THE SMALL BUSINESS
STANDARD FOR STANDARD INDUSTRIAL CLASSIFICATION (SIC) 3621 WAS 1,000
EMPLOYEES. A LETTER WAS WRITTEN TO YOU ON SEPTEMBER 2, 1965, BY THE
CONTRACTING OFFICER EXPLAINING THAT THE PROCUREMENT WAS NOT A SMALL
BUSINESS SET-ASIDE AND THAT THEREFORE NEGOTIATIONS WITH SMALL BUSINESS
CONCERNS WERE NOT AUTHORIZED. IT WAS FURTHER EXPLAINED THAT INCLUSION
OF PARAGRAPHS 16 AND 17 OF THE ADDITIONAL INSTRUCTIONS AND CONDITIONS OF
THE SOLICITATION WAS NOT INDICATIVE OF SMALL BUSINESS RESTRICTED
ADVERTISING. RATHER, THE PARAGRAPHS WERE INCLUDED FOR THE PURPOSE OF
DETERMINING PRIORITIES IN THE EVENT EQUAL LOW BIDS WERE RECEIVED AND THE
PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.6 HAD
TO BE FOLLOWED. IT WAS FURTHER STATED THAT ASPR 1-703/B) (5) PROVIDES
THAT THE DETERMINATION OF THE SMALL BUSINESS SIZE STANDARD SHALL BE MADE
BY THE CONTRACTING OFFICER AND HIS DETERMINATION SHALL BE FINAL UNLESS
APPEALED IN ACCORDANCE WITH ASPR 1-703 (B) (6) AND THAT SUCH APPEAL HAD
TO BE MADE PRIOR TO BID OPENING.
UPON REQUEST TO HEADQUARTERS, ARMY MATERIEL COMMAND, APPROVAL WAS
RECEIVED BY THE CONSTRUCTING OFFICER ON SEPTEMBER 7, 1965, TO AWARD A
CONTRACT FOR ITEM 1 OF THE SOLICITATION, OR 4,907 UNITS, BASED ON THE
URGENT REQUIREMENT FOR THIS QUANTITY OF THE ITEMS WHICH IS TO BE
UTILIZED AS GOVERNMENT-FURNISHED MATERIAL IN THE FISCAL YEAR 1966
PRODUCTION OF UH-1 AIRCRAFT. AWARD IS SAID TO BE PENDING RECEIPT OF A
FAVORABLE PREAWARD SURVEY AND OTHER REQUIRED CLEARANCES, TO THE LOWEST,
RESPONSIVE, RESPONSIBLE BIDDER.
THE PROTEST IS SHOWN, REGARDLESS OF THE SEVERAL POINTS RAISED BY YOUR
LETTERS, TO HAVE RESOLVED ITSELF INTO A BASIC QUESTION OF THE ARMY'S
RIGHT TO HAVE ISSUED AN INVITATION FOR THE PROCUREMENT WHICH WAS NEITHER
A TOTAL NOR A PARTIAL SET-ASIDE FOR SMALL BUSINESS. PRELIMINARY TO THIS
QUESTION, HOWEVER, THE EFFECT OF THE CONTRACTING OFFICER'S APPARENT
ERROR IN DEFINING THE SMALL BUSINESS SIZE STANDARD APPLICABLE TO THE
ITEM MUST BE CONSIDERED.
IT IS ADMINISTRATIVELY REPORTED THAT FOR PURPOSES OF THIS PROCUREMENT
THE CONTRACTING OFFICER DEFINED SMALL BUSINESS AS A CONCERN HAVING 500
EMPLOYEES OR LESS BASED UPON HIS DETERMINATION THAT THE ITEM IN QUESTION
CAME UNDER SECTION 3611 OF THE SIC MANUAL (1957 EDITION) FOR WHICH THE
APPLICABLE SIZE STANDARD IS 500 EMPLOYEES AND NOT SECTION 3621, FOR
WHICH THE APPLICABLE SIZE STANDARD IS 1,000 EMPLOYEES. THIS
DETERMINATION WAS MADE BY THE CONTRACTING OFFICER PURSUANT TO THE
AUTHORITY CONTAINED IN ASPR 1-703 (B) (5) AND IT IS NOTED THAT NO APPEAL
FROM SUCH DETERMINATION WAS MADE WITHIN THE PERIOD PRESCRIBED BY ASPR
1-703 (B) (6). NOTWITHSTANDING THE ABOVE, THE MATTER IS REPORTED TO
HAVE BEEN REFERRED TO THE SBA THROUGH ITS ST. LOUIS, MISSOURI,
REPRESENTATIVE FOR A FINAL DETERMINATION OF THE SMALL BUSINESS SIZE
STANDARD WHICH SHALL BE APPLICABLE TO FUTURE PROCUREMENTS OF THE ITEM,
RECOGNIZING THE FINAL AND EXCLUSIVE AUTHORITY OF THAT AGENCY TO DECLARE
SIZE STANDARDS TO BE USED IN THE DEFINITION OF SMALL BUSINESS CONCERNS
FOR VARIOUS INDUSTRIES. 15 U.S.C. 637 (B) (6). ASSUMING THAT THE
APPLICABLE SIZE STANDARD FOR THE ITEM IS 1,000 EMPLOYEES, THIS FACT DOES
NOT OFFSET THE GOOD-FAITH DETERMINATION MADE BY THE CONTRACTING OFFICER
NOR DOES IT SUPPORT THE PROTEST, NO TIMELY OBJECTION HAVING BEEN MADE ON
THIS ISSUE, ON THE VALIDITY OF THE PRIMARY ISSUE TO BE CONSIDERED, THAT
IS, WHETHER THE CONTRACTING OFFICER IMPROPERLY FAILED TO MAKE A SMALL
BUSINESS SET-ASIDE FOR THIS PROCUREMENT.
ASPR 1-706.5 (A) (1) PROVIDES AS FOLLOWS:
"SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA
SET-ASIDES AS PROVIDED IN 1-803 (A) (II), THE ENTIRE AMOUNT OF AN
INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT
NOT LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION,
SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION (SEE
1-701.1) IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE
EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT
NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE
MADE AT REASONABLE PRICES. TOTAL SET-ASIDES SHALL BE MADE UNLESS SUCH A
REASONABLE EXPECTATION EXISTS. (BUT SEE 1-706.6 AS TO PARTIAL
SET-ASIDES.) ALTHOUGH PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR
ITEMS IS ALWAYS IMPORTANT, IT IS NOT THE ONLY FACTOR WHICH SHOULD BE
CONSIDERED IN DETERMINING WHETHER A REASONABLE EXPECTATION EXISTS.'
ASPR 1-706.6 PROVIDES IN PERTINENT PART AS FOLLOWS:
"/A) SUBJECT TO ANY APPLICABLE PREFERENCE FOR LABOR SURPLUS AREA
SET-ASIDES AS PROVIDED IN 1-803 (A) (II), A PORTION OF A PROCUREMENT,
NOT INCLUDING CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL
BUSINESS PARTICIPATION (SEE 1-706.1) WHERE:
"/II) THE PROCUREMENT IS SEVERABLE INTO TWO OR MORE ECONOMIC
PRODUCTION RUNS OR REASONABLE LOTS (SEE 1-804.1 (A) (2) (I/-/V); * * *"
IT IS A LONG-RECOGNIZED POLICY OF THE DEPARTMENT OF DEFENSE THAT A
FAIR PROPORTION OF THE DEPARTMENT'S TOTAL 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 ASPR 1-706.5 (A) (1), ABOVE. THE DECISION AS TO
WHETHER A PROCUREMENT SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL
BUSINESS CONCERNS IS WITHIN THE PROVINCE OF THE ADMINISTRATIVE AGENCY.
SEE ASPR 1-706.1 (A), REVISION, 12, AUGUST 1, 1965. NEITHER THE
PROVISIONS CONTAINED IN PART 7 OF SECTION 1 OF ASPR NOR THE PROVISIONS
OF THE SMALL BUSINESS ACT MAKE IT MANDATORY THAT THERE BE SET ASIDE FOR
SMALL BUSINESS ANY PARTICULAR PROCUREMENT. MOREOVER, WE FEEL THAT YOUR
COMPANY WAS NOT PREJUDICED BECAUSE THERE WAS NOT SET-ASIDE FOR SMALL
BUSINESS SINCE YOUR COMPANY WAS ON THE QPL AND HAD AMPLE OPPORTUNITY TO
OBTAIN AN AWARD HAD YOU BID SUFFICIENTLY LOW AND OTHERWISE MET THE
REQUIREMENTS. REGARDING THE ADMINISTRATIVE ACTION TAKEN IN THE
CIRCUMSTANCES, THE ITEM FOR WHICH BIDS WERE SOLICITED IS A QUALIFIED
PRODUCT AND, CONSEQUENTLY, SOURCES OF SUPPLY WERE NECESSARILY
RESTRICTED. IT APPEARS THAT AT THE TIME OF ISSUANCE OF THE
SOLICITATION, THE CONTRACTING OFFICER CONCLUDED IN GOOD FAITH THAT THERE
WERE THREE LARGE BUSINESS CONCERNS AND ONE SMALL BUSINESS CONCERN ON THE
QPL. IN VIEW OF THESE CIRCUMSTANCES THE CONTRACTING OFFICER HAD VALID
AND SUFFICIENT GROUNDS TO SUPPORT HIS DETERMINATION THAT THERE WAS NO
REASONABLE EXPECTATION THAT BIDS COULD BE OBTAINED FROM A SUFFICIENT
NUMBER OF SMALL BUSINESS CONCERNS SO THAT AWARD COULD BE MADE AT
REASONABLE PRICES. THIS DETERMINATION CONSEQUENTLY ELIMINATED THE
POSSIBILITY OF A TOTAL SMALL BUSINESS SET-ASIDE IN ACCORDANCE WITH
INSTRUCTIONS CONTAINED IN ASPR 1-706.5 (A) (1).
REGARDING THE POSSIBILITY OF AT LEAST A PARTIAL SMALL BUSINESS
SET-ASIDE IN THE CIRCUMSTANCES, AS CONTENDED IN YOUR PROTEST, THE
RECORDS SHOW THAT THE FACTS AVAILABLE TO THE CONTRACTING OFFICER
AT THE TIME HE MADE HIS DETERMINATION AGAINST A PARTIAL SMALL
BUSINESS SET-ASIDE INDICATED THAT THIS PROCEDURE ALSO WAS NOT FEASIBLE.
THE PROCUREMENT HISTORY OF THE ITEM DISCLOSED THAT NO PARTIAL SET-ASIDES
HAD EVER BEEN MADE BY THE ARMY OR THE AIR FORCE, BASICALLY BECAUSE IT
WAS BELIEVED THAT SUCH PROCUREMENTS WERE NOT SEVERABLE INTO TWO OR MORE
ECONOMIC PRODUCTION RUNS. ASPR 1.706.6 (A) (II). FURTHER, THE
CONTRACTING OFFICER FELT THAT INASMUCH AS THERE WAS ONLY ONE SMALL
BUSINESS CONCERN ON THE QPL THE PRACTICAL EFFECT OF A PARTIAL SET-ASIDE
WOULD RESULT IN THE AWARD OF A CONTRACT ON THE SET-ASIDE PORTION WITHOUT
EFFECTIVE COMPETITION, SUBJECT ONLY TO THE 120-PERCENT LIMITATION OF THE
PARTIAL SET-ASIDE CLAUSE AS SET FORTH IN ASPR 1.706.6 (C). BASED ON
THESE FACTS THE CONTRACTING OFFICER MADE AN HONEST JUDGMENT WHICH LED TO
HIS GOOD-FAITH DETERMINATION THAT A PARTIAL SMALL BUSINESS SET-ASIDE WAS
NOT INDICATED FOR THIS PROCUREMENT.
THE RESULTS OF THE BIDDING AND THE APPARENT FACTUAL SITUATION WHICH
HAS DEVELOPED IN CONNECTION WITH THE INVITATION ARE NOT DETERMINATIVE OF
THE QUESTION AS TO WHETHER THERE WAS AT THE TIME OF ISSUING THAT
INVITATION A REASONABLE EXPECTATION OF SUFFICIENT COMPETITION FROM SMALL
BUSINESS CONCERNS. THE SITUATION HEREIN IS ACCENTUATED BY THE FACT THAT
YOUR PROTEST ON THESE POINTS WAS NOT FORTHCOMING UNTIL AFTER BIDS WERE
OPENED AND THE AMOUNTS BID WERE MATTERS OF PUBLIC KNOWLEDGE.
IN FACT, 13 DAYS HAD ELAPSED AFTER BID OPENING DATE BEFORE YOUR
PROTEST WAS MADE. IN THE CIRCUMSTANCES IT MUST BE CONCLUDED THAT YOUR
PROTEST AMOUNTS TO MERELY A SECOND REQUEST TO BID ON THE PROCUREMENT,
WHICH IS CONTRARY TO THE BASIC POLICIES OF THE COMPETITIVE BIDDING
SYSTEM.
ON THE BASIS OF THE FACTUAL SITUATION PRESENT IN THIS CASE THE
DEPARTMENT OF THE ARMY HAS CONCLUDED, AND WE AGREE, THAT IT WOULD NOT BE
IN THE BEST INTERESTS OF THE GOVERNMENT FROM THE STANDPOINT OF
MAINTAINING THE INTEGRITY OF BOTH THE COMPETITIVE BIDDING SYSTEM AND THE
SMALL BUSINESS SET-ASIDE PROGRAM TO REJECT ALL BIDS AND CANCEL THE
INVITATION WITH A VIEW TOWARD NEGOTIATING A CONTRACT WITH ONE OF THE
SMALL BUSINESS BIDDERS. IT IS OUR OPINION THAT, IN THE CIRCUMSTANCES OF
THIS PARTICULAR CASE, AS SET OUT ABOVE, SUCH ACTION CLEARLY WOULD BE
CONTRARY TO ASPR 2-404.1, WHICH PROVIDES, IN PERTINENT PART, THAT "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.' WE SEE
NO SUCH COMPELLING REASON INVOLVED HERE. 28 COMP. GEN. 662.
ACCORDINGLY, THE PROTEST MADE TO OUR OFFICE IN THE MATTER MUST BE,
AND IS, DENIED.
B-157649, NOV. 22, 1965
TO THE SECRETARY OF THE AIR FORCE:
DURING THE AUDIT OF CIVILIAN PAYROLLS AT WARNER ROBINS AIR MATERIEL
AREA WHICH WAS CONDUCTED BY OUR OFFICE IN MAY 1965, WE QUESTIONED THE
SALARY RATES ALLOWED SEVEN EMPLOYEES ON THE BASIS THAT UPON PROMOTION
THEY WERE PAID AT RATES ABOVE THE MINIMUM OF THE GRADES TO WHICH
PROMOTED WITHOUT PROPER JUSTIFICATION UNDER THE HIGHEST PREVIOUS RATE
RULE AS CONTAINED IN SECTION 531.203 (C) OF THE CIVIL SERVICE
REGULATIONS (FORMERLY SECTION 25.103 (B) ).
A QUESTION HAS ARISEN WITH REGARD TO THE MAXIMUM SALARY RATE WHICH
COULD HAVE BEEN ALLOWED ONE OF THOSE EMPLOYEES, MRS. ALMA W. KERR, UNDER
APPLICABLE CIVIL SERVICE AND AIR FORCE REGULATIONS. MRS. KERR WAS
EMPLOYED AT GENTILE AIR FORCE BASE, DAYTON, OHIO, IN A WAGE BOARD
POSITION AT $2.40 PER HOUR FROM JULY 28, 1957, THROUGH MARCH 15, 1958,
AT WHICH TIME SHE RECEIVED A WITHIN-GRADE INCREASE TO $2.54 PER HOUR.
ON MAY 4, 1958, SHE WAS CONVERTED TO A CLASSIFIED POSITION AT GRADE GS-5
(G), $4,480 PER ANNUM AND AFTER RECEIVING A LONGEVITY INCREASE IN THAT
GRADE SHE WAS PROMOTED TO GRADE GS-7 ON JANUARY 21, 1962, WITH
COMPENSATION AT WITHIN-GRADE STEP (G), $6,345 PER ANNUM. ON JUNE 3,
1962, SHE TRANSFERRED TO WARNER ROBINS AT THE SAME GRADE AND RATE OF
PAY.
IT WAS DETERMINED DURING OUR AUDIT THAT THE ALLOWANCE OF THE $6,345
RATE WAS IMPROPER UNDER SECTION 25.103 (C) OF THE CIVIL SERVICE
REGULATIONS WHICH PROVIDED IN PERTINENT PART:
"* * * IF SUCH HIGHEST PREVIOUS RATE WAS EARNED IN A POSITION NOT
SUBJECT TO THE CLASSIFICATION ACT, THIS RATE SHALL BE COMPUTED AS
FOLLOWS: THE ACTUAL RATE EARNED AT THE TIME OF SUCH SERVICE SHALL BE
CONVERTED TO THE EQUIVALENT PER ANNUM RATE UNDER THE CLASSIFICATION ACT
AS OF THE TIME OF SUCH SERVICES; WHERE THERE WAS NO EXACT EQUIVALENT
PER ANNUM RATE UNDER THE CLASSIFICATION ACT, THE NEXT HIGHER
CLASSIFICATION ACT RATE SHALL BE CONSIDERED AN EQUIVALENT; WHERE THE
RATE THUS DETERMINED FALLS WITHIN TWO OR MORE GRADES UNDER THE ACT, THE
RATE IN THE GRADE WHICH GIVES THE EMPLOYEE THE MAXIMUM BENEFIT SHALL BE
USED; THE EQUIVALENT CLASSIFICATION ACT RATE THUS DETERMINED SHALL BE
CONVERTED TO THE CURRENT RATE FOR SUCH STEP AND GRADE AND SHALL BE THE
EMPLOYEE'S HIGHEST PREVIOUS RATE.'
THE RATE OF $2.54 PER HOUR WHICH MRS. KERR EARNED FROM MARCH TO MAY
1958 WAS CONVERTED TO A RATE PRESCRIBED BY THE FEDERAL EMPLOYEES SALARY
INCREASE ACT OF 1955 (69 STAT. 172) WHEREAS THE CLASSIFICATION ACT RATES
IN FORCE DURING THE TIME SHE WAS PAID AT THE $2.54 RATE WERE THOSE
PRESCRIBED BY THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958 (72
STAT. 203), WHICH BECAME EFFECTIVE IN JANUARY 1958. SEE 44 COMP. GEN.
518. IN DETERMINING THE AMOUNT OF THE OVERPAYMENT WHICH HAS BEEN MADE
TO MRS. KERR AS A RESULT OF THAT ERROR IT IS ASSUMED THAT THE
RESPONSIBLE OFFICERS OF YOUR DEPARTMENT INTENDED TO GIVE HER THE MAXIMUM
BENEFIT OF THE HIGHEST PREVIOUS RATE RULE AT THE TIME THEY PROMOTED HER
TO GRADE GS-7 ON JANUARY 21, 1962.
THE QUESTION INVOLVED IS WHETHER THE $2.54 RATE--- THE HIGHEST RATE
PAID MRS. KERR AS A WAGE BOARD EMPLOYEE--- MUST BE CONSIDERED HER
HIGHEST PREVIOUS RATE OR WHETHER ANOTHER RATE ($2.40 PER HOUR) WHICH SHE
HAD PREVIOUSLY EARNED MAY BE CONSIDERED HER HIGHEST PREVIOUS RATE SINCE
THAT RATE GIVES HER A GREATER BENEFIT UNDER THE RULES FOR COMPUTING THE
HIGHEST PREVIOUS RATE. ADMINISTRATIVE OFFICIALS OF WARNER ROBINS AIR
MATERIEL AREA VIEW THE CIVIL SERVICE COMMISSION'S REGULATIONS AS
REQUIRING USE OF THE HOURLY RATE OF $2.54 AS THE HIGHEST PREVIOUS RATE.
THE COMPUTATIONS INVOLVED ARE AS FOLLOWS: (1) $2.54 BY 2080 EQUALS
$5,283.20. THE RATE FOR GS-7 (C) WAS $5,280 AND FOR GS-7 (D) WAS $5,430
AT THE TIME MRS. KERR WAS PAID AT THE $2.54 RATE. UNDER CIVIL SERVICE
REGULATIONS HER HIGHEST PREVIOUS RATE WAS THE RATE FOR GRADE GS-7 (D).
ACCORDINGLY, UPON PROMOTION TO GRADE GS-7 MRS. KERR'S RATE OF PAY UNDER
THE CIVIL SERVICE REGULATIONS, AND BY USE OF THE $2.54 HOURLY RATE,
COULD NOT HAVE EXCEEDED THE RATE FOR GRADE GS-7 (D), $5,850. (2) $2.40
BY 2080 EQUALS $4,992. SINCE MRS. KERR EARNED THE $2,40 RATE BEFORE
THE EFFECTIVE DATE OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958
THAT WAGE BOARD RATE MAY BE COMPARED TO THE RATES OF PAY PRESCRIBED BY
THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, THAT WAGE BOARD RATE
MAY BE COMPARED TO THE RATES OF PAY PRESCRIBED BY THE FEDERAL EMPLOYEES
SALARY INCREASE ACT OF 1955. THE RATE $4,992 FALLS BETWEEN THE RATES
FOR GS-7 (D), $4,930, AND FOR GS-7 (E), $5,065, AND BETWEEN THE RATES
FOR GS-8 (A), $4,970, AND FOR GS-8 (B), $5,105. UNDER THE CIVIL SERVICE
REGULATION QUOTED ABOVE IF THE $2.40 RATE MAY BE USED MRS. KERR, UPON
PROMOTION, COULD HAVE BEEN PAID AT THE RATE FOR GRADE GS-7 (F/--- $6,180
SINCE THE RATE FOR GRADE GS-8 (B) AT THE TIME OF HER
PROMOTION ($6,050) FELL BETWEEN THE RATES FOR GS-7 (E) AND GS-7 (F).
WE BELIEVE THAT THE SECOND METHOD OF COMPUTATION IS PERMITTED UNDER
THE CIVIL SERVICE REGULATION AND WE FIND NOTHING IN AIR FORCE
REGULATIONS IN FORCE AT THE TIME WHICH PROHIBITS THE USE OF THAT METHOD
OF COMPUTATION. THEREFORE, OUR OPINION IS THAT MRS. KERR'S DEBT SHOULD
BE COMPUTED ON THE BASIS THAT SHE SHOULD HAVE BEEN ALLOWED THE RATE FOR
STEP (F) OF GRADE GS-7 ($6,180) INSTEAD OF FOR STEP (G) $6,345 WHEN SHE
WAS PROMOTED TO THAT GRADE ON JANUARY 21, 1962. ON THE BASIS OF RECORDS
FURNISHED US BY WARNER ROBINS AIR MATERIEL AREA WE HAVE DETERMINED THAT
THE GROSS AMOUNT OF HER DEBT WAS $445.24 ON JUNE 26, 1965, OF WHICH
$441.60 CONSISTS OF BASIC COMPENSATION AND $3.64 OVERTIME COMPENSATION.
AFTER THAT DATE HER SALARY WAS REDUCED TO THE RATE OF GRADE GS-7, STEP
5, WHEREAS IN ACCORDANCE WITH COMPUTATION (2) ABOVE, HER COMPENSATION
SHOULD HAVE BEEN REDUCED ONLY TO THAT FOR GRADE GS-7, STEP 7. AS A
RESULT SHE HAS BEEN UNDERPAID AT THE RATE OF $16 PER DAY FROM JUNE 27,
1965. MRS. KERR'S SALARY SHOULD BE ADJUSTED TO THE RATE FOR GRADE
GS-7, STEP 7, AND CREDIT SHOULD BE GIVEN HER AS A RESULT OF THE
UNDERPAYMENTS IN QUESTION. APPROPRIATE REVISIONS WILL BE MADE BY OUR
OFFICE IN INFORMAL INQUIRY NO. 58-0179 CONSISTENT WITH THE ABOVE
DETERMINATIONS.
B-157797, NOV. 22, 1965
TO MR. HENRY C. JANSSEN:
ON SEPTEMBER 22, 1965, YOU REQUESTED FURTHER CONSIDERATION OF YOUR
CLAIM FOR REIMBURSEMENT OF TRAVEL AND RELATED EXPENSES FOR YOURSELF AND
FAMILY DURING JULY AND AUGUST 1964 INCIDENT TO YOUR TRANSFER FROM
MUNICH, GERMANY, TO CHAMBERSBURG, PENNSYLVANIA, AS AN EMPLOYEE OF THE
DEPARTMENT OF THE ARMY.
THE TRAVEL WAS PERFORMED BY PRIVATELY-OWNED VEHICLE FROM MUNICH TO
BREMERHAVEN, GOVERNMENT-OWNED VESSEL (MSTS) BREMERHAVEN TO NEW YORK, AND
PRIVATELY-OWNED VEHICLE FROM NEW YORK TO CHAMBERSBURG, AS AUTHORIZED BY
YOUR TRAVEL ORDER.
SETTLEMENT OF YOUR ORIGINAL VOUCHER WAS ERRONEOUSLY MADE BY THE
AGENCY ON THE BASIS OF TRAVEL TO NEW YORK, YOUR HOME OF RECORD, RATHER
THAN TO CHAMBERSBURG, YOUR NEW DUTY STATION. IN THAT SETTLEMENT YOU
WERE ALLOWED PER DIEM IN THE AMOUNT OF $22.50 AND MILEAGE IN THE AMOUNT
OF (510 BY 12) $61.20 OR A TOTAL OF $83.70. THEREAFTER, YOU FILED CLAIM
HERE AND WERE ALLOWED $48.50 AS ADDITIONAL PER DIEM AND $25.68 AS
ADDITIONAL MILEAGE. IN YOUR PRESENT LETTER YOU REQUEST FURTHER
CONSIDERATION OF CERTAIN OF THE ITEMS NOT ALLOWED IN OUR SETTLEMENT.
CONCERNING PER DIEM FOR JULY 31 TO AUGUST 2, YOU SAY:
"ATTACHED DD FORM 1299, DTD 25 JUN 64 (INCLOSURE NO. 2) SHOWS THAT MY
ACCOMPANIED BAGGAGE WAS TO BE SHIPPED PER USNS DARBY ON 22 JUL 64. UPON
MY ARRIVAL IN BROOKLYN ON 31 JUL 64, THIS BAGGAGE COULD NOT BE LOCATED
AT THE BROOKLYN ARMY TERMINAL. I WAS REQUESTED BY AN EMPLOYEE, MRS.
ROSENBLUM, TO RETURN TO THE TERMINAL ON MONDAY, 3 AUG 64. AFTER THE
BAGGAGE COULD NOT BE FOUND THE SECOND TIME THE BILL OF LADING WAS
CHECKED. IT TURNED OUT THAT MY BAGGAGED HAD NOT COME WITH THE SHIP I
CAME ON. A DD FORM 1299 WAS MADE OUT BY MRS. ROSENBLUM. THIS IS
DOCUMENTED IN THE ATTACHED TWX FROM THE CHAMBERSBURG TRANSPORTATION
OFFICER TO THE BROOKLYN ARMY TERMINAL (INCLOSURE NO. 3). THUS MY STAY
IN NEW YORK WAS DUE TO CIRCUMSTANCES BEYOND MY CONTROL AND AT THE ADVICE
OF WHAT I HAD TO CONSIDER COMPETENT AUTHORITY. PER DIEM FOR 3
ADDITIONAL DAYS (7/31/64 - 8/2/64) APPEARS DUE.'
THE FILE CONTAINS A LETTER FROM THE ASSISTANT CHIEF, PASSENGER
OPERATIONS DIVISION, BROOKLYN ARMY TERMINAL, FROM WHICH IT APPEARS THAT
PRIOR TO DEBARKING ALL CABIN CLASS PASSENGERS ARE GIVEN
BRIEFING IN WHICH THEY ARE ADVISED THAT HOLD BAGGAGE NORMALLY IS
AVAILABLE BY 2 P.M. ON THE DATE OF DEBARKING BUT IF FOR SOME REASON
THERE IS A DELAY THEY COULD EXECUTE A FORM DD 1299 AND SUCH BAGGAGE
WOULD BE SHIPPED TO THEM. IN VIEW THEREOF WE DO NOT SEE WHY IT WAS
NECESSARY FOR YOU TO SPEND THREE DAYS IN NEW YORK PENDING ARRIVAL OF
YOUR BAGGAGE UNLESS FOR PERSONAL REASONS YOU WISHED TO ACCEPT DELIVERY
OF ALL OR A PART THEREOF AT THAT POINT. THEREFORE, NO FURTHER PER DIEM
IS ALLOWABLE.
CONCERNING MILEAGE, THE AGENCY MADE SETTLEMENT ON THE BASIS OF TRAVEL
PERFORMED BY PRIVATELY-OWNED AUTOMOBILE FROM MUNICH TO BREMERHAVEN AND
FROM PORT OF DEBRAKATION TO STATEN ISLAND, YOUR HOME OF RECORD. YOU
WERE ALLOWED 510 MILES AT 12 CENTS PER MILE. THE SETTLEMENT BY OUR
CLAIMS DIVISION WAS BASED ON 491 MILES FROM MUNICH TO BREMERHAVEN AND
233 MILES FROM NEW YORK TO CHAMBERSBURG OR A TOTAL OF 724 MILES.
THEREFORE, YOU WERE ALLOWED AN ADDITIONAL 214 MILES WHICH APPEARS TO BE
CORRECT. THE MILEAGE IN GERMANY IS THAT ESTABLISHED BY THE DEPARTMENT
OF THE ARMY AS THE OFFICIAL DISTANCE FOR TRAVEL BY HIGHWAY BETWEEN THE
STATED POINTS. THE MILEAGE FROM NEW YORK TO CHAMBERSBURG IS THAT SHOWN
IN THE RAND-MCNALLY STANDARD HIGHWAY MILEAGE GUIDE. FURTHER, SINCE
THERE DOES NOT APPEAR TO HAVE BEEN ANY OFFICIAL NECESSITY FOR YOU TO
REMAIN IN NEW YORK THE TRAVEL FROM THE BROOKLYN ARMY TERMINAL TO
MANHATTAN ON JULY 31 AND RETURN THERETO ON AUGUST 3 MUST BE CONSIDERED
AS HAVING BEEN MADE FOR PERSONAL REASONS AND THE ADDITIONAL MILEAGE
CLAIMED THEREFOR MAY NOT BE ALLOWED.
AS TO THE TRAVEL EXPENSES OF YOUR DEPENDENTS IT APPEARS YOU TRAVELED
BY AUTOMOBILE FROM MUNICH TO BREMERHAVEN VIA BAESWEILER, AN INDIRECT
ROUTE. TWO OF YOUR CHILDREN WERE STAYING AT BAESWEILER AT THE TIME.
AFTER A STOPOVER OF SEVERAL DAYS YOU SENT YOUR FIVE DEPENDENTS FROM
AACHEN (NEAREST RAILROAD POINT TO BAESWEILER) TO BREMERHAVEN BY RAIL FOR
WHICH YOUR CLAIM REIMBURSEMENT IN THE SUM
OF $60. IN JUSTIFICATION THEREOF YOU SAY THAT IT WAS PHYSICALLY
IMPOSSIBLE TO CARRY THEM IN YOUR CAR (RAMBLER AMERICAN) AND FURTHER, THE
CAR WAS LOADED TO CAPACITY WITH "11 PIECES OF LUGGAGE PLUS SEVERAL
HANDBAGS.' WITH RESPECT TO THE TRAVEL FROM NEW YORK TO CHAMBERSBURG YOU
SAY YOUR FOUR CHILDREN REMAINED IN NEW YORK AT THE TIME BECAUSE OF LACK
OF HOUSING IN CHAMBERSBURG AND ALSO
THAT YOUR CAR AGAIN WAS LOADED WITH BAGGAGE. SOME TWO WEEKS LATER
THEY TRAVELED BY PRIVATELY-OWNED AUTOMOBILE TO CHAMBERSBURG.
WHILE YOU AND YOUR DEPENDENTS WERE AUTHORIZED TO PERFORM LAND TRAVEL
ABROAD BY RAIL OR PRIVATELY-OWNED VEHICLE SUCH AUTHORIZATION DID NOT
CONTEMPLATE, NOR DO WE KNOW OF ANY RULE WHICH PERMITS AN EMPLOYEE TO
UTILIZE THE CAR FOR THE TRANSPORTATION OF BAGGAGE AND RECEIVE RAIL FARE
FOR THE TRAVEL OF HIS ENTIRE FAMILY. HOWEVER, WE AGREE THAT IT WAS
INFEASIBLE FOR SIX PERSONS WITH THEIR NECESSARY HAND BAGGAGE TO TRAVEL
THE DISTANCE REQUIRED IN THE AVAILABLE AUTOMOBILE, THEREFORE, WE ARE
ALLOWING YOU TWO ADULT TRAIN FARES FROM AACHEN TO BREMERHAVEN IN THE
AMOUNT OF $32.70. FOR THE SAME REASON YOUR CLAIM FOR ADDITIONAL ONE-WAY
MILEAGE (233 MILES) FROM NEW YORK TO CHAMBERSBURG ALSO WILL BE ALLOWED.
ALSO, IN THE BASIS OF YOUR EXPLANATION, THE TOLLS IN THE SUM OF $1.65
WILL BE ALLOWED.
YOU ALSO CLAIMED $3 AS REIMBURSEMENT FOR TIPS FOR HANDLING YOUR
DEPENDENTS' BAGGAGE AND $11 FOR TIPS ON SHIP WHICH SUM YOU "CONSIDERED
APPROPRIATE FOR SERVICE RENDERED TO (YOUR) DEPENDENTS.' IN SUPPORT
THEREOF YOU CITE CPR T3.7-7A (5). THAT SECTION PERTAINS ONLY TO REDCAP
AND SKYCAP CHARGES FOR HANDLING PERSONAL BAGGAGE AND SO FAR AS PERTINENT
HERE PROVIDES "* * * REDCAP SERVICE CHARGES MAY BE ALLOWED FOR THAT
PORTION OF THE DEPENDENTS PERSONAL BAGGAGE WHICH CANNOT BE HANDLED BY
THE SPONSOR.' THUS, THE REGULATION PERMITS BUT DOES NOT REQUIRE
REIMBURSEMENT FOR TIPS INCIDENT TO THE HANDLING OF BAGGAGE. THE AGENCY
DISALLOWED YOUR CLAIM FOR THIS ITEM AND IN ITS REPORT ON YOUR RECLAIM
EXPRESSED DISAPPROVAL THEREOF. WE DO NOT BELIEVE THE REASONS FOR SUCH
ACTION ARE UNREASONABLE AND, THEREFORE, MUST SUSTAIN THE ACTION
HERETOFORE TAKEN. WE KNOW OF NO AUTHORITY FOR REIMBURSEMENT FOR THE
GRATUITIES GIVEN FOR SERVICE RENDERED FOR YOUR DEPENDENTS ABOARD SHIP.
A SETTLEMENT FOR THE ADDITIONAL AMOUNTS REFERRED TO HEREIN WILL ISSUE
IN DUE COURSE.
B-157033, NOV. 19, 1965
TO SELLERS, CONNER AND CUNEO:
WE HAVE RECEIVED LETTERS FROM YOUR CLIENT, UNIVAC, DATED JUNE 18 AND
JULY 8, 1965, AND YOUR LETTERS DATED JULY 15, AUGUST 11 AND 13,
SEPTEMBER 14, 23, AND 28, AND OCTOBER 15 AND 21, 1965, PROTESTING AN
AWARD BY THE UNITED STATES MARINE CORPS OF A CONTRACT TO INTERNATIONAL
BUSINESS MACHINE CORPORATION (IBM) FOR THE RENTAL AND OPTION FOR
SUBSEQUENT PURCHASE OF CONFIGURATIONS OF AUTOMATIC DATA PROCESSING
EQUIPMENT (ADPE). YOU CHARGE THAT IBM'S PROPOSAL WAS ACCEPTED
NOTWITHSTANDING ITS FAILURE TO CONFORM TO CERTAIN MANDATORY REQUIREMENTS
OF THE RFP, AND THAT UNIVAC WAS PREJUDICED BY NOT BEING GIVEN THE
OPPORTUNITY TO SUBMIT AN OFFER IN ACCORDANCE WITH THE RELAXATION OF SUCH
REQUIREMENTS.
THE PROCUREMENT INVOLVES ADPE TO BE ASSEMBLED INTO CONFIGURATIONS
WHICH WILL CONFORM TO THE REQUIREMENTS OF REQUEST FOR PROPOSALS (RFP)
001-64, INCLUDING A REQUIREMENT FOR ONE PRIMARY AND ONE ALTERNATE DIRECT
MASS STORAGE SYSTEM TO HOUSE A MASTER INVENTORY FILE, AND WHICH WILL
THEREBY SUPPORT THE MARINE CORPS UNIFIED MATERIEL MANAGEMENT SYSTEMS
(MUMMS). SINCE THE ACTUAL PIECES OF EQUIPMENT MAKING UP THE
CONFIGURATIONS ARE TO BE PURCHASED AGAINST GSA FEDERAL SUPPLY SCHEDULE
(FSS) MULTIPLE AWARD CONTRACTS, THE PROCUREMENT BEARS A SUPERFICIAL
SIMILARITY TO FSS PROCUREMENTS OF RELATIVELY UNCOMPLICATED COMMON-USE
ITEMS SUCH AS STATIONERY SUPPLIES AND OFFICE EQUIPMENT. HOWEVER, THE
SELECTION OF THIS ADPE WAS PRECEDED BY SEVERAL MONTHS OF INVESTIGATION
ESSENTIAL TO DRAWING SPECIFICATIONS APPROPRIATE FOR MARINE CORPS NEEDS.
THESE SPECIFICATIONS CONSTITUTED THE MAJOR PART OF THE VOLUMINOUS RFP
WHICH WAS ISSUED TO SELECTED OFFERORS ON DECEMBER 30, 1964, BY THE DATA
PROCESSING DIVISION OF THE MARINE CORPS. THE PROVISIONS OF THE RFP
WHICH ARE RELEVANT TO UNIVAC'S PROTEST ARE SET FORTH BELOW:
"CHAPTER I
"0106 INQUIRIES. INQUIRIES CONCERNING THIS RFP WILL BE SUBMITTED IN
WRITING TO THE DIRECTOR OF THE ISSUING OFFICE, CITING THE PROPOSAL
REFERENCE NUMBER. QUESTIONS AND ANSWERS OF A SUBSTANTIVE NATURE WILL BE
MAILED TO ALL VENDORS WHO INDICATE A DESIRE TO PARTICIPATE. A SUMMARY
OF MAJOR DEADLINES FOR THIS PROJECT IS CONTAINED IN PARA 0120.
"0107 VENDOR'S CONFERENCE. A VENDOR'S CONFERENCE MAY BE HELD
CONSISTING OF A QUESTION AND ANSWER PERIOD. ANYTHING WHICH CLARIFIES OR
AMENDS THIS REQUEST FOR PROPOSAL WILL BE MADE AVAILABLE TO ALL
MANUFACTURERS CONCERNED AS AN ADDENDUM TO THE BASIC RFP. A REASONABLE
NUMBER OF SESSIONS WILL BE HELD WITH EACH VENDOR, ON REQUEST.
SUBSEQUENT QUESTIONS WILL BE PRESENTED FORMALLY BY LETTER AS PROVIDED IN
PARAGRAPH 0106.
"0110 EQUIPMENT AVAILABILITY. EQUIPMENT PROPOSED IN RESPONSE TO THIS
RFP MUST HAVE BEEN FORMALLY ANNOUNCED FOR MARKETING PURPOSES AS OF THE
CLOSING DATE OF THIS REQUEST FOR PROPOSAL, AND EXIST AT LEAST IN
PROTOTYPE FORMS.
"0111 TYPE OF PROCUREMENT. THE EQUIPMENT PROPOSED TO BE PURCHASED OR
LEASED UNDER THIS RFP WILL BE ORDERED FROM THE GENERAL SERVICES
ADMINISTRATION (GSA) FEDERAL SUPPLY SCHEDULE IF AVAILABLE.
"0120 CALENDAR FOR MARINE CORPS PROJECT 001-64
"NO. ACTIVITY DATES
* * * * * * * * *
3 PROPOSAL SUBMISSION DEADLINE 1 APR. 1965
* * * * * * * * *
6 EQUIPMENT INSTALLATION AT ICP
(INVENTORY CONTROL POINT),
PHILADELPHIA COMPLETED 1 FEB. 1966
7 EQUIPMENT INSTALLATION AT ALL
ACTIVITIES COMPLETED 1 JUN. 1966*
* * * * * * * * *
*THESE DATES ARE TENTATIVE AND MAY BE CHANGED
BY THE MARINE CORPS AS REQUIRED.
"CHAPTER II
"0123 EVALUATION CRITERIA. THE DATA PROCESSING DIVISION WILL
VALIDATE AND EVALUATE ALL PROPOSALS RECEIVED AND EFFECT PROPOSAL
SELECTION. EQUIPMENT PROPOSALS WHICH DO NOT MEET THE REQUIREMENTS OF
THIS ATTACHMENT AND/OR PROCESSING SPECIFICATIONS OUTLINED IN ATTACHMENTS
2-15 WILL NOT BE CONSIDERED FOR SELECTION.
"0124 MANDATORY REQUIREMENTS. THE FOLLOWING SUBPARAGRAPHS PRESCRIBE
THE MANDATORY REQUIREMENTS TO BE COMPLIED WITH IN RESPONDING TO THIS
RFP. A STATEMENT ABOUT EACH ITEM LISTED IS REQUIRED IN THE VENDOR'S
PROPOSAL, PART I, SECTION 2, MANDATORY REQUIREMENTS, AS PRESCRIBED IN
CHAPTER III, ATTACHMENT 1.
"1. SYSTEM COMPLIANCE. THE PROPOSAL MUST CLEARLY DEMONSTRATE THE
CAPABILITY OF THE PROPOSED EQUIPMENT CONFIGURATION TO MEET THE TOTAL
SYSTEM PROCESSING REQUIREMENTS.
"3B. PROGRAM. THE PROPOSED EQUIPMENT MUST BE ABLE TO COMPILE AND
OPERATE COBOL (COMMON BUSINESS ORIENTATED LANGUAGE) SOURCE PROGRAMS FROM
STATEMENTS UNDER THE REQUIRED PORTIONS OF COBOL 61 EXTENDED. EVEN
THOUGH CENTRALIZED PROGRAMMING MAY NOT RESULT FROM COBOL STATEMENTS,
THERE WILL BE OTHER APPLICATIONS WHICH WILL INVOLVE THE ADPE SELECTED
AND COBOL CAPABILITY IS THEREFORE PERTINENT.
"5. AVAILABILITY OF EQUIPMENT.
"A. EQUIPMENT PROPOSED IN RESPONSE TO THIS RFP MUST HAVE BEEN
FORMALLY ANNOUNCED FOR MARKET PURPOSES AS OF THE CLOSING DATE OF THIS
REQUEST FOR PROPOSAL AND EXIST IN AT LEAST A PROTOTYPE FORM.
"B. THE GOVERNMENT DESIRES THE EQUIPMENT BE INSTALLED AND
OPERATIONAL IN ACCORDANCE WITH THE ,INSTALLATION DATE" AS SHOWN IN
PARAGRAPH 0120.
"12. SOFTWARE. (WE UNDERSTAND THAT "SOFTWARE," BROADLY DEFINED, MAY
BE TAKEN TO INCLUDE THE MEDIA AND LANGUAGE BY WHICH MAN COMMUNICATES
WITH THE MACHINES, AND THE MACHINES WITH EACH OTHER.)
"A. THE VENDOR MUST PROVIDE THE FOLLOWING MINIMAL SOFTWARE ROUTINES
OR EQUIVALENT, CAPABLE OF BEING OPERATED ON THE PROPOSED EQUIPMENT
CONFIGURATION FOR THE ICP:
(1) SORT/MERGE GENERATOR
(2) EXECUTIVE ROUTINE
(3) COBOL"
IN THE MARINE CORPS LETTER OF DECEMBER 30, 1965, WHICH ACCOMPANIED
THE ISSUANCE OF THE RFP, OFFERORS WERE ADVISED OF AN ADDITIONAL
REQUIREMENT, AS FOLLOWS:
"IN ADDITION, IT IS INTENDED TO REQUIRE THE VENDORS WHO SUBMIT
PROPOSALS TO PROGRAM AND DEMONSTRATE THE CAPABILITY OF THEIR EQUIPMENT
TO ACCOMPLISH THE DATA PROCESSING FUNCTIONS SPECIFIED IN THIS RFP. THE
DEMONSTRATION WILL REQUIRE PROGRAMMING OF THE PROCESSES SPECIFIED BELOW
TO INDICATE THROUGHPUT SPEED AND ACCESS TIME FOR RECORDS OF A SIMILAR
LENGTH.
"THE DEMONSTRATION MUST BE ACCOMPLISHED ON A CONFIGURATION OF
IDENTICAL SPEED AND CAPACITY TO THAT RECOMMENDED BY THE MANUFACTURER.
POSITIVE BLOCKOUTS OF EXCESS MEMORY, SPECIAL DEVICES, INPUT/OUTPUT
EQUIPMENT, ETC, WILL BE USED, AS REQUIRED, ON THE DEMONSTRATION
HARDWARE.
"THE "BENCHMARK" PROBLEM WILL CONSIST OF THE FOLLOWING:
"TWO REELS OF TAPE FROM EACH OF THE TWO COMPLEX INVENTORY FILES WILL
BE PROVIDED EACH VENDOR. THESE TAPES MUST BE CONVERTED FROM THE PRESENT
UNIVAC III MODE TO THE NEW CONSOLIDATED RECORD FORMAT OF THE MASTER
INVENTORY FILE DESCRIBED IN ATTACHMENT 03 OF THIS RFP. THE NEW
CONVERTED AND CONSOLIDATED RECORDS WILL BE LOADED IN THE DIRECT ACCESS
MODE STORAGE OFFERED BY THE VENDOR. THE TAPES WILL BE AVAILABLE AT THE
VENDORS' REQUEST ON 15 JANUARY 1965 TO ALLOW SUFFICIENT TIME TO TEST
CONVERSION PROGRAMS.
"A DEMONSTRATION OF THROUGHPUT SPEED AND RANDOM ACCESS TIMES WILL BE
REQUIRED BY PROCESSING 2000 TRANSACTIONS IN A PREARRANGED SEQUENCE,
ACCESSING THE APPROPRIATE RECORD IN DIRECT ACCESS STORAGE, AND PRINTING
ALL OR PORTIONS OF THE RECORD AS SPECIFIED BY A TRANSACTION CODE IN THE
INPUT. PUNCHED CARDS CONTAINING 2000 FEDERAL STOCK NUMBERS WILL BE
PROVIDED FOR TEST PURPOSES ALONG WITH THE TAPE FILES. WHEN THE ACTUAL
DEMONSTRATION IS PERFORMED ANOTHER 2000 TRANSACTIONS WILL BE DELIVERED
TO THE VENDOR IN A PREARRANGED SEQUENCE. THE DEMONSTRATION MUST ACCEPT
THE TRANSACTIONS IN THE PREARRANGED SEQUENCE, ACCESS THE MASTER FILE IN
THE SAME ORDER AND PERPETUATE THE SEQUENCE IN THE PRINTED OUTPUT.'
OFFERORS WERE FURNISHED FURTHER DETAIL WITH RESPECT TO THE BENCHMARK
PROBLEM IN A LETTER OF DECEMBER 15, 1965, WHEREIN THE FOLLOWING
STATEMENTS WERE MADE:
"THE BENCHMARK PROBLEM WILL BE PROGRAMMED AND RUN TWICE: FIRST, IN
AN ASSEMBLY LANGUAGE AND, SECOND IN COBOL OR A SIMILAR COMPILER
LANGUAGE.
"FOR THE PURPOSE OF THIS DEMONSTRATION MUCH DETAIL REQUIRED FOR AN
ACTUAL CONVERSION HAS BEEN OMITTED. ONLY THOSE ELEMENTS READILY
CONVERTED WITH A MINIMUM OF LOGIC ARE CONSIDERED FOR THIS DEMONSTRATION.
IT IS ESTIMATED THE MASTER INVENTORY FILE CONSTRUCTED FOR THIS
BENCHMARK WILL REQUIRE ONLY 30 PERCENT OF THE STORAGE CAPACITY WHICH
WILL ULTIMATELY BE REQUIRED WHEN THE FILE IS
CONSTRUCTED WITH ALL FIELDS CODED AND LOADED.'
DURING THE NEGOTIATIONS, THE MARINE CORPS ISSUED SEVERAL LETTERS TO
CLARIFY OR AMEND THE RFP IN ACCORDANCE WITH PARAGRAPH 0107 OF THE RFP,
OR TO ANSWER INQUIRIES SUBMITTED IN ACCORDANCE WITH PARAGRAPH 0106. IN
RELEVANT PART, THE LETTERS PROVIDED: (LETTER OF JANUARY 29, 1965)
"SEVERAL QUESTIONS CONCERNING THE MUMMS REQUEST FOR PROPOSALS HAVE
BEEN SUBMITTED BY A MANUFACTURER (UNIVAC). THE QUESTIONS AND OUR
ANSWERS ARE GIVEN BELOW FOR YOUR INFORMATION.
"QUESTION NO. 3: DO YOUR PLANS FOR IMPLEMENTATION INCLUDE EXTENSIVE
COBOL UTILIZATION FOR THE MASTER INVENTORY UPDATE AND RELATED
APPLICATIONS? IF NOT, WHERE SPECIFICALLY DO YOU PLAN TO UTILIZE COBOL
PROGRAMMING?
"ANSWER: SINCE COBOL IS REQUIRED BY DOD DIRECTIVE, ALL EQUIPMENT
PROPOSED MUST HAVE IT AVAILABLE. HOWEVER, IT IS IMPOSSIBLE AT THIS TIME
TO SPECIFY HOW MUCH OR WHERE COBOL WILL BE USED IN MUMMS.
"QUESTION NO. 7: ARE WE CORRECT IN ASSUMING THAT WHAT YOU MEAN BY
FORMALLY ANNOUNCED COMPUTING SYSTEMS MEANS DULY CERTIFIED WITH THE GSA
SCHEDULE ON ALL CONTENTS PRIOR TO 1 APRIL 1965?
"ANSWER: YES.
"QUESTION NO. 11: IN ADDITION TO A SYSTEM THAT HAS BEEN FORMALLY
ANNOUNCED AND IN AT LEAST THE PROTOTYPE STAGE, DO YOU FURTHER REQUIRE
THAT ALL OPERATIONAL SOFTWARE BE AVAILABLE FOR THIS SYSTEM ON 1 APRIL
1965?
"ANSWER: YES.' (LETTER OF FEBRUARY 17, 1965)
"QUESTION NO. 10: THE BENCHMARK PROGRAM HAS POSED A PROBLEM. IF THE
MASTER INVENTORY FILE IS TO BE STORED IN A DIRECT ACCESS MEDIA, THE
BENCHMARK CANNOT BE PROGRAMMED IN COBOL 61 EXTENDED AS IT DOES NOT
PROVIDE THE ABILITY TO PROCESS DIRECT ACCESS STORAGE. PLEASE COMMENT.
"ANSWER: A TRUE STATEMENT. THE BENCHMARK IS REVISED TO DELETE THE
REQUIREMENT FOR PROGRAMMING IN COBOL.' (LETTER OF MARCH 30, 1965)
"A LETTER WAS RECEIVED BY THE MANUFACTURER (RCA) CONTAINING THE
FOLLOWING INFORMATION:
"BASED ON OUR DISCUSSION CONCERNING THE MANDATORY EQUIPMENT
REQUIREMENT FOR BENCHMARK DEMONSTRATION, WE HAVE REVIEWED CORRESPONDENCE
AND YOUR REQUEST FOR PROPOSAL, AND NOTE THE FOLLOWING:
"1. PARAGRAPH 2, LETTER DATED 15 DECEMBER 1964 FROM DIRECTOR DATA
PROCESSING DIVISION, U. S. MARINE CORPS TO RCA: "YOUR ATTENTION IS
INVITED TO THE FACT THAT SELECTION WILL NOT BE MADE UNTIL MAJOR PROGRAM
DEMONSTRATIONS HAVE TAKEN PLACE EMPLOYING SYSTEM EQUIPMENT CONTAINED IN
OUR PROPOSALS.'
"2. PARAGRAPH 4, PAGE 1, LETTER DATED 30 DECEMBER 1964 FROM DIRECTOR
DATA PROCESSING DIVISION, U.S. MARINE CORPS, TO RCA: "THE DEMONSTRATION
MUST BE ACCOMPLISHED ON A CONFIGURATION OF IDENTICAL SPEED AND CAPACITY
TO THAT RECOMMENDED BY THE MANUFACTURER.'
"3. PARAGRAPH 11, SAME LETTER: "A DEMONSTRATION OF THRUPUT SPEED
AND RANDOM ACCESS TIMES WILL BE REQUIRED BY PROCESSING 2,000
TRANSACTIONS IN A PRE-ARRANGED SEQUENCE, ACCESSING APPROPRIATE RECORD IN
DIRECT ACCESS STORAGE...'
"WE UNDERSTAND THIS TO MEAN THAT THOSE CRITICAL COMPONENTS NECESSARY
FOR AN ACCURATE MEASURE OF THRUPUT SPEED (MAIN FRAME, IMMEDIATE ACCESS
MASS STORAGE DEVICE, ON-LINE HIGH SPEED PRINTER, ETC.)
MUST BE DEMONSTRATED ON EQUIPMENT EQUIVALENT IN SPEED AND CAPACITY AS
THAT EQUIPMENT RECOMMENDED IN THE MANUFACTURER'S PROPOSAL. IT IS
FURTHER UNDERSTOOD THAT THE ONE EXCEPTION TO THE ABOVE IS THAT THE
COMMUNICATION INTERFACE MAY BE SIMULATED.
"THE FOLLOWING REFERENCES APPLY IN RESPONSE TO THE ABOVE.
LTR APC-CH 10462/1 OF 15 DEC 1964: PARA 2.
LTR AP-DLS 10462/1 OF 30 DEC 1964: PARA 3, 4 AND 5.
LTR APA-SML 4440 OF 15 JAN 1965: BENCHMARK PROGRAM
LTR APC-MCH 10462/1 OF 29 JAN 1965: QUESTION AND ANSWER NO. 1,
5, 6, 7 AND 11.
LTR APC-DLS 10462/1 OF 17 FEB 1965: QUESTION AND ANSWER NO. 4 AND
10.
LTR APC-MCH 10462/1 OF 2 MAR 1965: QUESTION SET "B" QUESTION
AND ANSWER NO. 12.
SYSTEM SPECIFICATIONS FOR MUMMS REP 001-64:
CHAPTER I PARA 0110, 0114.1, 0114.3, PAGE 01-4
CHAPTER II PARA 0124.5, 0124.12, 0124.16, PAGE 01-9, 01-10, 01-11
CHAPTER III, PART II PARA 2-3, PAGE 01-17" "
THE "EVALUATION CRITERIA" SET FORTH IN PARAGRAPH 0123 OF THE RFP
PRESUMABLY CONTEMPLATED THE APPLICATION OF PROCEDURES IN ACCORD WITH DOD
DIRECTIVE 4105.55, DATED SEPTEMBER 28, 1963, TITLED ,SELECTION AND
ACQUISITION OF AUTOMATIC DATA PROCESSING EQUIPMENT (ADPE).' THE SUBJECT
DIRECTIVE PROVIDES IN RELEVANT PART:
"IV. GENERAL POLICIES
"A. IN THE SELECTION OF ADPE, EQUAL OPPORTUNITY AND CONSIDERATION
SHALL BE ACCORDED TO ALL MANUFACTURERS WHO OFFER EQUIPMENT CAPABLE OF
MEETING THE SYSTEM SPECIFICATIONS.
"V. ADPE SELECTION AND ACQUISITION CRITERIA
"A. SELECTION CRITERIA. ALL OF THE FOLLOWING CRITERIA WILL BE
ADHERED TO IN SELECTING ADPE.
"1. SPECIFICATIONS
"A. DATA SYSTEM SPECIFICATIONS WILL BE DESIGNED TO INSURE FULL AND
FREE COMPETITION AMONG QUALIFIED EQUIPMENT MANUFACTURERS.
"B. IDENTICAL DATA SYSTEMS SPECIFICATIONS WILL BE FURNISHED ALL
QUALIFIED VENDORS.
"3. SELECTION FACTORS
"A. TWO PRIME FACTORS SHALL BE CONSIDERED IN THE SELECTION OF
EQUIPMENT.
"/1) ITS CAPABILITY TO FULFILL THE DATA SYSTEM SPECIFICATIONS, AND
"/2) ITS OVER-ALL COSTS * * *.
"B. OTHER FACTORS TO BE CONSIDERED IN DETERMINING THE ADVANTAGES OF
A PARTICULAR EQUIPMENT IN SATISFYING DOD NEEDS INCLUDE:
"/1) EXISTENCE OF THE EQUIPMENT IN PRODUCTION MODEL, OR AT LEAST IN
AN OPERATIONAL PROTOTYPE:
"/2) RELIABILITY OF THE EQUIPMENT WHERE AVAILABLE THROUGH OPERATING
EXPERIENCE AT OTHER INSTALLATIONS (DETERMINATION OF UNRELIABILITY SHOULD
BE FACTUALLY SUPPORTED).
"/3) PERFORMANCE OF THE EQUIPMENT WHERE SIMULATED (BENCH MARK)
PROBLEMS ARE USED AS AN ADDITIONAL MEANS OF COMPARISON AND EVALUATION;
* * *.'
WITH RESPECT TO THE DOD GENERAL POLICY OF AFFORDING EQUAL OPPORTUNITY
AND CONSIDERATION TO ALL RESPONSIVE MANUFACTURERS, SECNAV INSTRUCTION
P10462.7A, THE SUBJECT OF WHICH IS THE NAVY'S ADPE PROGRAM, CONTAINS THE
FOLLOWING STATEMENT IN PARAGRAPH IV C:
"IN THE SELECTION OF ADPE, EQUAL OPPORTUNITY AND CONSIDERATION SHALL
BE ACCORDED TO ALL SUPPLIERS WHO OFFER EQUIPMENT CAPABLE OF MEETING THEY
SYSTEM SPECIFICATIONS. THIS MEANS THAT ALL QUALIFIED SOURCES OF SUPPLY
MUST BE CONSIDERED; AND EQUAL INFORMATION, OPPORTUNITY, AND FACILITIES
MUST BE MADE AVAILABLE TO EACH POTENTIAL SUPPLIER. THERE IS NO
REQUIREMENT, HOWEVER, TO CONSIDER EQUIPMENT WHICH DOES NOT EXIST IN AT
LEAST PROTOTYPE FORM.'
IN ADDITION, IT IS NOTED THAT ASPR 5-102.3 MAKES USE OF THE FSS
MANDATORY FOR PURCHASES BY DOD AGENCIES FOR GROUP 72, FCS CLASS 7440,
AUTOMATIC DATA PROCESSING SYSTEMS, AND ASPR 1-300.1 PROVIDES THAT "ALL
PROCUREMENTS, WHETHER BY FORMAL ADVERTISING OR BY NEGOTIATION, SHALL BE
MADE ON A COMPETITIVE BASIS TO THE MAXIMUM PRACTICAL EXTENT.' UNDER THE
PRECEPTS RECOGNIZED IN OUR DECISION B-121926, B-122682, DATED MARCH 21
AND APRIL 12, 1955, AND FEBRUARY 7 AND MARCH 12, 1956, A CONTRACT
BETWEEN THE GOVERNMENT AND A MANUFACTURER OF ADPE WHICH IS TO A
SUBSTANTIAL DEGREE PROPRIETARY OR IN MATERIAL RESPECTS DIFFERENT IN
FUNCTION, OPERATION OR DESIGN FROM ADPE OFFERED UNDER SIMILAR CONTRACTS
BY OTHER MANUFACTURERS, DOES NOT RIPEN INTO A BINDING OBLIGATION FOR ANY
PARTICULAR MACHINE OR SYSTEM OF MACHINES UNTIL THE GOVERNMENT HAS MADE A
VALID DETERMINATION OF ITS ACTUAL NEEDS AND HAS ISSUED A PURCHASE ORDER
TO THE CONTRACTOR SELECTED TO FILL THOSE NEEDS. UNDER THE GROUND RULES
ESTABLISHED BY THE INSTANT RFP AND THE ADMINISTRATIVE POLICIES QUOTED
ABOVE, IT IS CLEAR THAT THE SPECIFICATIONS DEFINING THE NEEDS OF THE
MARINE CORPS WERE TO BE DRAWN, AND THE SUCCESSFUL CONTRACTOR SELECTED,
IN SUCH A MANNER AS TO PRESERVE COMPETITION TO THE MAXIMUM EXTENT
POSSIBLE AND TO INSURE THE CONSIDERATION OF COMPETITIVE OFFERS ON AN
EQUAL BASIS.
PROPOSALS WERE RECEIVED FROM RCA, IBM, AND UNIVAC. AFTER ANALYSIS OF
THE PROPOSALS, A MARINE CORPS SELECTION TEAM CONCLUDED THAT IBM'S
PROPOSED MAIN MEMORY AND MASS STORAGE, ON-LINE PROCESSING CAPABILITY,
REMOTE DEVICES, AND TOTAL SYSTEM CONCEPT OF SOFTWARE ARE MOST
SATISFACTORY FOR MARINE CORPS REQUIREMENTS; THAT IBM'S PROPOSED
CONFIGURATION WILL PROCESS THE DAILY REQUIREMENTS IN THE LEAST AMOUNT OF
TIME WHEN OVERLAP IS APPLIED; THAT IBM'S PROPOSED SYSTEM WAS SUPERIOR
WHEN ANALYZED FOR ABILITY TO OPERATE IN A DEGRADED CONDITION; THAT IBM
BEST MEETS THE REQUIREMENT OF THE IMMEDIATE AND LONG RANGE OBJECTIVES;
AND THAT UNDER ANY COSTING PLAN CONSIDERING ALL COST FACTORS, THE IBM
COST WILL BE LESS THAN THAT OF UNIVAC. THE MARINE CORPS' RECOMMENDATION
THAT THE AWARD BE MADE TO IBM WAS APPROVED BY A SPECIAL ASSISTANT TO THE
SECRETARY OF THE NAVY, AND SUPPLY ORDERS WERE ISSUED TO IBM ON JUNE 11,
1965.
YOU ALLEGE THAT COMPETITION WAS CURTAILED AND OFFERORS WERE NOT ABLE
TO COMPETE ON AN EQUAL BASIS. SPECIFICALLY, YOU SAY THAT IBM COULD NOT
HAVE CONDUCTED ITS BENCHMARK DEMONSTRATIONS ON AN ADPE CONFIGURATION
WITH SPEED AND CAPACITY IDENTICAL TO THAT PROPOSED, AS REQUIRED BY THE
DECEMBER 30 LETTER, BECAUSE THE DATA CELL DRIVE/2321 PROPOSED BY IBM AS
THE PRIMARY MEMORY STORAGE DEVICE FOR ITS SYSTEM/360 WAS NOT INTEGRATED
INTO OR OPERATIONAL WITH THAT SYSTEM AT THE TIME OF THE BENCHMARK.
FURTHERMORE, YOU CONTEND THAT THE MARINE CORPS LETTER OF MARCH 30
CONSTITUTED A REJECTION OF ANY RELAXATION OF THE "IDENTICAL SPEED AND
CAPACITY" STATEMENT TO "EQUIVALENT IN SPEED AND CAPACITY.' IN ADDITION,
YOU SAY IBM DID NOT HAVE "ALL OPERATIONAL SOFTWARE" ON APRIL 1, 1965, A
REQUIREMENT YOU CONTEND WAS ESTABLISHED BY THE MARINE CORPS LETTER OF
JANUARY 29, 1965.
YOU MAINTAIN THAT THE EQUIPMENT A VENDOR CHOSE TO PROPOSE WAS
MATERIALLY AFFECTED BY THE FACT THAT SUCH EQUIPMENT HAD TO BE AVAILABLE,
AND THAT DEMONSTRATION OF IT WAS REQUIRED. YOU CONCLUDE THAT UNIVAC HAS
BEEN PREJUDICED BECAUSE THE REQUIREMENT THAT OFFERORS DEMONSTRATE ON
AVAILABLE OPERATING EQUIPMENT IDENTICAL IN SPEED AND CAPACITY TO THAT
WHICH IT PROPOSED TO FURNISH PRECLUDED UNIVAC FROM OFFERING COMPONENTS
OF ITS 490 SERIES OF SYSTEMS, WHICH SERIES WAS FORMALLY ANNOUNCED BUT
NOT OPERATIONAL AT THE TIME OF THE BENCHMARK. AT THE SAME TIME, YOU
ALLEGE THAT UNIVAC WOULD HAVE HAD A PROTOTYPE OF THE 490 SYSTEM BY APRIL
1, AS ALSO REQUIRED IN THE DECEMBER 30 LETTER, BUT THAT SUCH PROTOTYPE
COULD NOT HAVE SUCCESSFULLY COMPLETED THE BENCHMARK, AND THEREFORE ITS
DEVELOPMENT WAS NOT UNDERTAKEN IN VIEW OF THE MANDATORY REQUIREMENT FOR
A BENCHMARK DEMONSTRATION OF IDENTICAL EQUIPMENT.
WITH RESPECT TO THE PURPOSE OF REQUIRING A BENCHMARK DEMONSTRATION,
THE MARINE CORPS REPORTS THAT THE DEMONSTRATION:
"* * * WAS NOT DESIGNED TO FULLY TEST ANY VENDOR'S CAPABILITY FOR
PROCESSING GREAT VOLUMES OF MATERIAL OR THE FULL-BLOWN MUMMS SYSTEM.
WHAT THE MARINE CORPS DESIRED FROM THE BENCHMARK WAS AN ASSURANCE THAT
HARDWARE DID IN FACT EXIST (AT LEAST IN PROTOTYPE FORM); THAT SOFTWARE
WAS AVAILABLE TO DRIVE THE HARDWARE; TO PROGRAM A NEW PROBLEM VICE
(SIC., INSTEAD OF) A PREVIOUSLY CANNED PROGRAM; TO INDICATE THE
VENDOR'S SYSTEMS AND PROGRAMMERS SUPPORT; AND TO DEMONSTRATE THAT
VENDORS WERE SUFFICIENTLY INTERESTED TO PROVIDE A DEMONSTRATION ...
"* * * IBM'S CONFIGURATION MET THE REQUIREMENT OF "IDENTICAL SPEED
AND CAPACITY" AND TO "BLOCK OUT EXCESS CAPACITY AND SPEED.' THE
CONFIGURATION DEMONSTRATED THAT SOFTWARE WAS AVAILABLE TO DRIVE THE
HARDWARE ...
"* * * THE MARINE CORPS DID NOT REQUIRE DEMONSTRATIONS HERE IN
WASHINGTON OR ON IDENTICAL EQUIPMENT BUT ALLOWED EACH VENDOR TO SELECT
HIS OWN SITE AND TO USE THE EQUIPMENT HE HAD AVAILABLE AND WHICH HE HAD
PROPOSED. A VENDOR COULD EASILY HAVE EQUIPMENT OF HIGHER SPEED AND/OR
GREATER CAPACITY ON WHICH THE BENCHMARK COULD BE DEMONSTRATED. TO
PRECLUDE AN UNFAIR ADVANTAGE IN THIS REGARD THE RESTRICTION OF IDENTICAL
SPEED AND CAPACITY WAS PLACED ON VENDORS. OBVIOUSLY, A DEMONSTRATION ON
SLOWER SPEED AND/OR LESSER CAPACITY EQUIPMENT WOULD BE DETRIMENTAL TO
THE VENDOR ...
"* * * IN ADDITION, TO THE BENCHMARK DEMONSTRATION, OTHER
DEMONSTRATIONS WERE PROVIDED BY THE IBM AND UNIVAC. ONE OF THE IBM
DEMONSTRATIONS WAS THE "DATA CELL DRIVE.' THIS WAS HERE IN WASHINGTON ON
9 APRIL 1965 AND WAS WITNESSED BY 16 OR 19 OF THE SELECTION COMMITTEE
MEMBERS. IN ADDITION IBM INVITED THE MARINE CORPS TO A DEMONSTRATION OF
THE "DATA CELL DRIVE" IN SAN JOSE, CALIFORNIA DURING THE PERIOD 12-23
APRIL 1965 BUT THE MARINE CORPS DECLINED DUE TO BUDGETARY AND TIME
RESTRICTIONS. SUBSEQUENT INQUIRY WITH OMI REVEALED THEY HAD WITNESSED
THE SAN JOSE DEMONSTRATION AND THAT THE MARINE CORPS VIEWING OF THIS
WOULD NOT HAVE BEEN NECESSARY IN THAT THE ,DATA CELL DRIVE" WORKED AS
DESCRIBED.'
IBM SAYS THAT IT PROPOSED FOUR DIFFERENT ADPE CONFIGURATIONS FOR THE
FIVE MAJOR INSTALLATION POINTS, AND THAT ALL FIVE POINTS WOULD USE A
CONFIGURATION EMPLOYING ITS 2311 DISK, A DIRECT ACCESS STORAGE DEVICE,
WHILE ONLY THREE WOULD ALSO EMPLOY THE 2321 DATA CELL DRIVE, ANOTHER
DIRECT ACCESS STORAGE DEVICE WHICH WE UNDERSTAND IS SLOWER BUT HAS A
GREATER CAPACITY THAN A DISK DEVICE. IBM CONCEDES THAT IT DID NOT USE
THE 2321 DATA CELL DRIVE FOR THE BENCHMARK DEMONSTRATION OF ITS
SYSTEM/360, BUT SAYS IT RELIED UPON THE 2311 DISK DEVICE BECAUSE THE
GREATER CAPACITY OF THE 2321 WAS UNNECESSARY TO SUCCESSFULLY COMPLETE
THE BENCHMARK. HOWEVER, IBM DOES NOT DENY THAT IT HAD NO AVAILABLE
SYSTEM/360 EMPLOYING THE 2321 DATA CELL WHICH COULD HAVE BEEN
DEMONSTRATED AS AN INTEGRATED UNIT.
WE ARE ADVISED THAT IBM BLOCKED OUT THE SPEED OF THE 2311 DISK BY
MEANS OF A CARD READER SO THAT THE DEMONSTRATION HARDWARE NOT ONLY HAD
LESS CAPACITY THAN THE SYSTEM PROPOSED FOR STORING THE MASTER INVENTORY
FILE, SINCE THE DEMONSTRATION GEAR FUNCTIONED WITHOUT BENEFIT OF THE
DATA CELL, BUT ALSO OPERATED AT A SLOWER SPEED THAN THE SYSTEM IBM
PROPOSED TO DELIVER.
IN RESPONSE TO IBM'S POSITION, YOU STATE THAT IBM PROPOSES TO USE THE
2311 DISK IN ITS SYSTEM/360 PRIMARILY IN THREE OF THE MAJOR
INSTALLATIONS AS AN INDEX TO GAIN ACCESS TO THE MASTER DATA FILE, WHICH
IS TO BE STORED ON THE 2321 DATA CELL. YOU ARGUE THAT SINCE THE PURPOSE
OF THE BENCHMARK WAS TO TEST THE OPERATION OF THE SYSTEM PROPOSED FOR
USE AT THE INVENTORY CONTROL POINT (ICP) TO HOUSE THE MASTER INVENTORY
FILE, USE OF A CONFIGURATION EMPLOYING ONLY THE 2311 DISK STORAGE DEVICE
WAS IMPROPER BECAUSE, ALTHOUGH SUCH CONFIGURATION MAY BE IDENTICAL TO
ONE IBM PROPOSES FOR USE AT OTHER THAN THE ICP, IT IS NOT IDENTICAL TO
THE ONE PROPOSED FOR THE ICP. FURTHERMORE, YOU ASSERT THAT WHILE THE
RFP PERMITTED QUANTITATIVE "BLOCKOUT" OF EXCESS MEMORY STORAGE DEVICES
FOR THE MASTER INVENTORY FILE, SUCH AS BLOCKING OUT TWO OF THE THREE
FASTRAND DRUMS UNIVAC PROPOSED FOR THAT FUNCTION, IT DID NOT PERMIT AN
OFFEROR TO TOTALLY ELIMINATE THE TYPE OF MEMORY DEVICE HE PROPOSED FOR
STORING THE MASTER INVENTORY FILE, AND TO USE INSTEAD A DIFFERENT MEMORY
DEVICE WHICH, IN THE DELIVERED SYSTEM, WOULD SERVE SOME FUNCTION OTHER
THAN STORING THE MASTER INVENTORY FILE.
BEFORE DISCUSSING THE CONFLICTING POSITIONS STATED ABOVE, IT SHOULD
BE NOTED THAT UNDER THE LITERAL REQUIREMENT OF THE DECEMBER 30 LETTER,
"BLOCK OUT" APPARENTLY REFERRED ONLY TO REDUCING MEMORY CAPACITY WHICH
WAS EXCESS TO THE IDENTICAL CAPACITY OF THE PROPOSED CONFIGURATION.
HOWEVER, IN OUR VIEW, ONE CANNOT REASONABLY CONCLUDE FROM THE DECEMBER
30 LETTER, OR FROM THE MARCH 30 LETTER, WHICH YOU REGARD AS EVIDENCE
THAT THE MARINE CORPS REJECTED A SUGGESTION THAT THE WORD "EQUIVALENT"
BE SUBSTITUTED FOR THE WORD "IDENTICAL," THAT THE MARINE CORPS INTENDED
TO ADVISE OFFERORS THEY COULD NOT BLOCK OUT SUCH HARDWARE TO A DEGREE
THAT IT ACTUALLY HAD LESS SPEED AND CAPACITY THAN THE GEAR PROPOSED FOR
DELIVERY.
THE INQUIRY TO WHICH THE MARCH 30 LETTER RESPONDED PARAPHRASED THE
ACTUAL LANGUAGE OF THE SUBSTANTIVE REQUIREMENTS OF THE RFP WITHOUT
INDICATING WHETHER ANY MATERIAL CHANGES WERE INTENDED, AND IT WAS
SUBMITTED ONLY A FEW DAYS PRIOR TO THE APRIL 1 CLOSING DATE FOR RECEIPT
OF PROPOSALS. IT APPEARS THAT RATHER THAN TAKE THE CHANCE OF
INADVERTENTLY SANCTIONING CHANGES OF SUBSTANCE, THE MARINE CORPS
ANSWERED THE INQUIRY AS PROVIDED FOR IN PARAGRAPH 0106 OF THE RFP BY
MERELY FURNISHING AN APPARENTLY EXHAUSTIVE LIST OF EARLIER ANSWERS,
LETTERS AND DOCUMENTS, WHICH MAY HAVE HAD SOME RELATION TO THE
BENCHMARK. IT DOES NOT APPEAR TO US THAT THE MARINE CORPS WAS
ATTEMPTING
TO CLARIFY THE RFP IN SUCH A MANNER AS TO PROHIBIT OFFERORS FROM
PERFORMING THE BENCHMARK WITH ONLY SO MUCH EQUIPMENT AS WAS NECESSARY TO
MEET THE DEMANDS OF THAT BENCHMARK. WE ASSUME YOU DO NOT DISAGREE WITH
THIS GENERAL CONCLUSION, SINCE IT APPEARS FROM THE RECORD THAT UNIVAC
REDUCED THE UNNEEDED CAPACITY OF ITS DEMONSTRATION HARDWARE BY BLOCKING
OUT TWO OF ITS THREE FASTRAND MEMORY DEVICES AND, THEREFORE, LIKE IBM AT
LEAST IN THIS RESPECT, DEMONSTRATED EQUIPMENT WHICH ACTUALLY HAD LESS
RATHER THAN IDENTICAL CAPACITY TO THE CONFIGURATION PROPOSED TO HANDLE
THE MASTER INVENTORY FILE.
THE FIRST POINT AT ISSUE THEREFORE APPEARS TO BE WHETHER THE MARINE
CORPS IS CORRECT IN CONCLUDING THAT THE IBM DEMONSTRATION DESCRIBED
ABOVE SATISFIED THAT REQUIREMENT IN THE DECEMBER 30 LETTER, THE
INTENTION OF WHICH WAS TO ADVISE OFFERORS THAT THEY MUST DEMONSTRATE ON
A CONFIGURATION OF NO GREATER SPEED AND CAPACITY THAN THAT PROPOSED, AND
ACCORDINGLY MUST REDUCE THE SPEED OR CAPACITY OF DEMONSTRATION HARDWARE
WHICH EXCEEDED THE PERFORMANCE OF THE PROPOSED SYSTEM IN THESE RESPECTS.
AS INDICATED ABOVE, THE RECORD SHOWS THAT SINCE THE BENCHMARK
PROBLEMS WOULD REQUIRE ONLY ABOUT 30 PERCENT OF THE STORAGE CAPACITY
ULTIMATELY NEEDED, BOTH UNIVAC'S AND IBM'S DEMONSTRATION HARDWARE
OPERATED AT LESS THAN THE FULL LEVEL OF PERFORMANCE OF THEIR PROPOSED
SYSTEMS. YOU URGE THAT THIS "BLOCK OUT" PROCEDURE IS IN ACCORD WITH THE
RFP ONLY SO LONG AS IT INVOLVES WHAT YOU CHARACTERIZE AS "QUANTITATIVE"
ELIMINATIONS RATHER THAN "QUALITATIVE" SUBSTITUTIONS. THIS VIEW WAS
FIRST EXPOUNDED AT A TIME WHEN YOU APPARENTLY ASSUMED THAT IBM HAD
COMPLETED THE BENCHMARK BY USING AN IBM 1300 DISK STORAGE DEVICE WHICH
IBM APPARENTLY DOES NOT PROPOSE TO USE IN ITS DELIVERED SYSTEM FOR THE
MUMMS PROCUREMENT. IT NOW DEVELOPS THAT IBM PERFORMED THE BENCHMARK BY
ELIMINATING ONE OF THE TWO DIRECT ACCESS STORAGE DEVICES IT PROPOSED TO
SUPPLY, AND USING THE REMAINING DEVICE FOR FUNCTIONS IT WOULD NOT SERVE
IN ACTUAL OPERATION WITH THE FULL MASTER INVENTORY FILE.
WITH THIS BACKGROUND, WE NOW CONSIDER YOUR POSITION THAT UNIVAC WAS
PREJUDICED BY THE MARINE CORPS' FAILURE TO ENFORCE THE REQUIREMENT THAT
IT PERFORM THE BENCHMARK ON AVAILABLE EQUIPMENT WHICH WAS IDENTICAL TO
THAT WHICH IT PROPOSED TO DELIVER. IT APPEARS FROM THE SPECIFICATIONS
AND AMENDMENTS THERETO, AS SET OUT ABOVE, THAT THE EQUIPMENT CHOSEN TO
CONSTITUTE THE PROPOSED CONFIGURATIONS HAD TO BE IMMEDIATELY "AVAILABLE"
ONLY IN THE SENSE OF HAVING BEEN DULY CERTIFIED WITH THE GSA SCHEDULE
PRIOR TO APRIL 1, 1965, AND EXIST IN AT LEAST PROTOTYPE FORM. THE
RECORD INDICATES THAT IBM MET THESE REQUIREMENTS. ADDITIONALLY,
OFFERORS WERE NOT REQUIRED TO DEMONSTRATE ON AN AVAILABLE CONFIGURATION
IDENTICAL TO THAT PROPOSED, BUT ON DEMONSTRATION HARDWARE WHICH WAS NO
FASTER AND HAD NO GREATER CAPACITY THAN THE SYSTEM PROPOSED FOR
DELIVERY. IBM MET THIS REQUIREMENT BY A TECHNIQUE WHICH WAS ACCEPTABLE
TO THE MARINE CORPS AND COMPATIBLE WITH THE "BLOCK OUTS" CONTEMPLATED BY
THE RFP, WHICH NOWHERE PRECLUDED AN OFFEROR FROM ELIMINATING FROM THE
DEMONSTRATION HARDWARE ONE OF ITS TWO PROPOSED MEMORY STORAGE DEVICES.
WHILE THE LANGUAGE OF THE DECEMBER 30 LETTER SPOKE OF "BLOCK OUT"
ONLY WITH RESPECT TO EXCESS CAPACITY, IT APPEARS THAT A BLOCK OUT OF
SPEED IN EXCESS OF THE PROPOSED CONFIGURATION WAS CERTAINLY CONSISTENT
WITH THE CLEAR INTENTION OF THE MARINE CORPS TO PROHIBIT BENCHMARK
DEMONSTRATIONS ON HARDWARE WHICH WAS FASTER THAN SUCH CONFIGURATION. WE
HAVE ALREADY INDICATED THAT THERE WAS NO OBJECTION TO EMPLOYING THE
BLOCK OUT TECHNIQUE SO THAT THE BENCHMARK HARDWARE MAINTAINED ONLY SUCH
A LEVEL OF PERFORMANCE AS WAS NECESSARY TO MEET THE LIMITED DEMANDS OF
THE BENCHMARK DEMONSTRATION. FURTHERMORE, IT WOULD APPEAR THAT A BLOCK
OUT OF EXCESS SPEED COULD HAVE WORKED TO THE DISADVANTAGE ONLY OF THE
OFFEROR USING SUCH BLOCK OUT, SINCE HARDWARE INFERIOR TO THE
CONFIGURATION IT PROPOSED TO SUPPLY WAS LESS LIKELY TO SUCCESSFULLY
COMPLETE THE BENCHMARK.
WE ARE ALSO AWARE THAT WHILE THE LANGUAGE OF THE DECEMBER 30 LETTER
DID NOT PROHIBIT OFFERORS FROM BLOCKING OUT DEMONSTRATION HARDWARE
CAPACITY OR SPEED IN EXCESS OF THAT NEEDED TO PERFORM THE BENCHMARK
DEMONSTRATION, AND REQUIRED THEM TO BLOCK OUT CAPACITY IN EXCESS OF THE
PROPOSED CONFIGURATION, IT NONETHELESS LITERALLY REQUIRED THE
DEMONSTRATION HARDWARE TO HAVE A SPEED AND CAPACITY IDENTICAL TO THE
PROPOSED CONFIGURATION, EVEN THOUGH THE MAXIMUM SPEED AND CAPACITY WOULD
BE NEITHER NEEDED NOR USED FOR THE BENCHMARK DEMONSTRATION. HOWEVER, IT
APPEARS THAT IF IBM HAD HAD THE 2321 DATA CELL IN ITS DEMONSTRATED
CONFIGURATION, IT COULD HAVE BLOCKED OUT THE DATA CELL SO THAT THE
ACTUAL CAPACITY OF THE PROPOSED CONFIGURATION NEED NEVER HAVE BEEN
DEMONSTRATED.
MOREOVER, NOTHING IN THE DOCUMENTS MAKING UP THE RFP EXPRESSLY
REQUIRES AN IDENTITY BETWEEN THE DEMONSTRATION HARDWARE AND THE
CONFIGURATION PROPOSED FOR THE MASTER INVENTORY FILE. IBM DID
DEMONSTRATE A CONFIGURATION WHICH WAS IDENTICAL IN SPEED AND CAPACITY TO
ONE OF THE MINOR CONFIGURATIONS IT PROPOSED TO SUPPLY (ALTHOUGH THE
MAXIMUM SPEED OF THE CONFIGURATION WAS BLOCKED OUT WHEN THE
DEMONSTRATION WAS ACTUALLY PERFORMED). WHILE THIS DEMONSTRATION MET THE
LITERAL REQUIREMENT OF THE RFP, WE RECOGNIZE THAT THE MARINE CORPS WAS
NOT INTERESTED IN TESTING A "MINOR" CONFIGURATION AS SUCH, AND WOULD
REGARD AS PURE COINCIDENCE THE APPARENT FACT THAT IBM'S DEMONSTRATION
HARDWARE COULD BE CONSIDERED BOTH AS A BLOCKED OUT VERSION OF THE
CONFIGURATION PROPOSED FOR STORING THE MASTER INVENTORY FILE, AS WELL AS
A SUBSTANTIALLY IDENTICAL VERSION OF A CONFIGURATION PROPOSED FOR OTHER
PURPOSES. JUST AS THE MARINE CORPS WOULD ACCORD NO SIGNIFICANCE TO THE
LITERAL FACT THAT IBM DEMONSTRATED A MINOR CONFIGURATION "IDENTICAL" TO
ONE OF THOSE IT PROPOSED TO DELIVER, WE ARE DISPOSED TO ACCORD NO
SIGNIFICANCE TO THE FACT THAT, TAKEN LITERALLY, THE DECEMBER 30 LETTER
REQUIRED OFFERORS TO PERFORM THE BENCHMARK DEMONSTRATION WITH A COMPLETE
CONFIGURATION, NOTWITHSTANDING THEIR FREEDOM TO MAKE ONLY PARTIAL USE OF
SUCH COMPLETE CONFIGURATION IN SUCCESSFULLY RUNNING THE BENCHMARK.
THEREFORE, WE FIND NO VALID BASIS FOR OBJECTION TO AN OFFEROR PERFORMING
THE DEMONSTRATION WITH A CONFIGURATION WHICH DID NOT INCLUDE A COMPONENT
WHICH THE OFFEROR COULD HAVE BLOCKED OUT IN ANY EVENT.
YOU ALSO CONTEND THAT IBM DID NOT MEET ALL PREREQUISITES NECESSARY
FOR CONSIDERATION OF ITS OFFER BECAUSE IT FAILED TO COMPLY WITH AN
ADDENDUM REQUIREMENT ESTABLISHED BY THE MARINE CORPS JANUARY 29 LETTER
ANSWERING QUESTIONS SUBMITTED BY UNIVAC. YOU POINT OUT THAT THE FIRST
QUESTION ASKED AND THE ANSWER GIVEN BY THE MARINE CORPS WAS:
"WHAT IS THE LAST DATE ON WHICH THE VENDOR WILL BE ALLOWED TO
DEMONSTRATE THE PRESCRIBED BENCHMARK?
"DEMONSTRATIONS WILL BE REQUIRED BETWEEN 12-23 APRIL 1965.'
YOU THEN EMPHASIZE THAT UNIVAC RECEIVED AN UNEQUIVOCAL "YES" ANSWER
TO THE FOLLOWING QUESTION RELATED TO SOFTWARE AVAILABILITY:
"IN ADDITION TO A SYSTEM THAT HAS BEEN FORMALLY ANNOUNCED AND IN AT
LEAST THE PROTOTYPE STAGE, DO YOU FURTHER REQUIRE THAT ALL OPERATIONAL
SOFTWARE BE AVAILABLE FOR THIS SYSTEM ON 1 APRIL 1965? "
NEITHER THE MARINE CORPS NOR IBM DENY YOUR ASSERTION THAT ON APRIL 1
IBM DID NOT HAVE THE MANDATORY SOFTWARE SET FORTH IN PARAGRAPH 0124/12)
OF THE RFP, OR ALL OF ITS OTHER SOFTWARE NECESSARY TO OPERATE THE
CONFIGURATION PROPOSED FOR STORAGE OF THE MASTER INVENTORY FILE.
HOWEVER, THEY TAKE THE POSITION THAT THE ONLY REQUIREMENT ESTABLISHED BY
THE ANSWER TO THE ABOVE QUESTION WAS THAT OFFERORS HAVE AVAILABLE ALL
SOFTWARE NECESSARY FOR THE OPERATIONS CONTEMPLATED ON APRIL 1, I.E., THE
BENCHMARK DEMONSTRATION, SCHEDULED FOR APRIL 12-23. WE ARE INFORMALLY
ADVISED BY THE MARINE CORPS THAT THE ONLY SOFTWARE IBM NEEDED TO PERFORM
THE BENCHMARK WAS THE ASSEMBLY LANGUAGE, AND CERTAIN SUBROUTINES SUCH AS
THE INPUT-OUTPUT HANDLER. IN ADDITION, THE MARINE CORPS ASSERTS THAT
ANY OTHER INTERPRETATION WOULD BE UNREASONABLE SINCE SOFTWARE COULD NOT
BE FULLY OPERABLE UNTIL THE SYSTEM HAD BEEN INSTALLED AND A DETAILED
ANALYSIS OF THE USER'S PROBLEMS HAD BEEN MADE.
YOUR CONTENTION THAT THE MARINE CORPS' INTERPRETATION OF "OPERATIONAL
SOFTWARE" ROBS THE PHRASE OF ANY SUBSTANTIAL MEANING IS WELL TAKEN,
SINCE THE REQUIREMENT FOR SOLVING THE BENCHMARK PROBLEMS NECESSARILY
IMPLIED THAT OFFERORS WOULD HAVE ALL SOFTWARE NEEDED TO SUCCESSFULLY
OPERATE THE BENCHMARK HARDWARE. AT THE SAME TIME, ONE MUST ALSO
RECOGNIZE THAT THE READER OF UNIVAC'S QUESTION MAY HAVE ASSUMED THAT ITS
OFFER HAD ASKED A QUESTION THE ANSWER TO WHICH OBVIOUSLY WARRANTED NO
MORE THAN A SIMPLE "YES; " I.E., YES, AN OFFEROR NECESSARILY WOULD HAVE
TO HAVE ALL SOFTWARE NECESSARY TO SUCCESSFULLY OPERATE ITS BENCHMARK
HARDWARE.
IN OUR VIEW, THERE IS MUCH TO SUPPORT THE POSITION THAT, IN LIGHT OF
OTHER PROVISIONS IN THE RFP AND IN AMENDMENTS THERETO, THE WORD
"OPERATIONAL" SHOULD NOT BE CONSTRUED SO AS TO CREATE A REQUIREMENT THAT
SOFTWARE IN ADDITION TO THAT NEEDED TO OPERATE THE BENCHMARK BE
AVAILABLE ON APRIL 1. IN THE FIRST PLACE, PARAGRAPH 0124/5/B OF THE RFP
DOES NOT REQUIRE THE EQUIPMENT TO BE ,OPERATIONAL" BEFORE FEBRUARY 1966,
THE FIRST INSTALLATION DATE, AND ON PAGE 01-17 OF THE RFP, OFFERORS ARE
ASKED TO LIST "SOFTWARE PACKAGES AVAILABLE OR TO BE AVAILABLE AT
INSTALLATION TIME FOR USE ON THE PROPOSED CONFIGURATIONS. DESCRIBE THE
FUNCTION OF EACH PACKAGE, ... AND FURNISH REPRESENTATIVE OPERATIONAL
TIMES. INCLUDE SUCH PACKAGES AS ASSEMBLY LANGUAGES, COMPILERS,
EXECUTIVE AND MONITORING PROGRAMS ...' THESE REQUIREMENTS WERE NEVER
AMENDED OR CLARIFIED, AND THEY ARE AT BEST DIFFICULT TO RECONCILE WITH
YOUR POSITION THAT "ALL OPERATIONAL SOFTWARE" WAS REQUIRED TO BE
AVAILABLE BY APRIL 1.
MOREOVER, THE PHRASE "OPERATIONAL SOFTWARE" APPARENTLY HAS NO
UNIVERSALLY UNDERSTOOD MEANING. FOR EXAMPLE, UNIVAC ASSERTS THAT TWO
SOFTWARE ROUTINES IT PROPOSED TO FURNISH, BECAUSE REQUESTED BY THE
MARINE CORPS AFTER THE BENCHMARK DEMONSTRATION, WERE NOT "OPERATIONAL,"
BUT WERE ONLY ,ADDITIONAL" OR "NICE TO HAVE.' ONE SUCH ROUTINE, REFERRED
TO IN A UNIVAC LETTER OF JUNE 7, 1965, TO THE MARINE CORPS, AS THE
"BINARY PACK AND UNPACK," WAS GUARANTEED TO WORK "EXACTLY AS STATED AND
WITH THE PERCENTAGES OF RANDOM STORAGE SAVED. (45 PERCENT).' ALTHOUGH
YOU REGARD THE BINARY PACK AND UNPACK AS "NICE TO HAVE," THE MUMMS STAFF
STUDY REPORT DATED MAY 14, 1965, INDICATES THAT "THE MARGINAL AMOUNT OF
MASS STORAGE (HARDWARE) UNIVAC PROPOSED MAKES IT MANDATORY THAT THE
MARINE CORPS USE A PACKING/EXPANSION ROUTINE (SOFTWARE). UNIVAC HAS
INDICATED THE DESIRE AND ABILITY TO WRITE AND TO FURNISH A SOFTWARE
ROUTINE TO PACK/EXPAND DATA TO/FROM MASS STORAGE. IBM AND RCA HAVE
PROPOSED SUFFICIENT MASS STORAGE TO PRECLUDE SUCH REQUIREMENT WITH THEIR
EQUIPMENT.'
YOU STATE THAT SINCE THESE "ADDITIONAL" SOFTWARE ROUTINES WERE NOT
REQUESTED BY THE MARINE CORPS UNTIL LATE APRIL, THEY COULD NOT BE SAID
TO FALL WITHIN THE APRIL 1 AVAILABILITY REQUIREMENT. HOWEVER, THIS
ASSUMES THE EXISTENCE OF AN APRIL 1 AVAILABILITY REQUIREMENT FOR
SOFTWARE "ADDITIONAL" TO THAT NECESSARY TO RUN THE BENCHMARK HARDWARE IN
APRIL, AND FURTHER ASSUMES THAT UNIVAC'S PHRASE OF "ALL OPERATIONAL
SOFTWARE" DID NOT INCLUDE THE "NICE TO HAVE" OR ,ADDITIONAL" SOFTWARE
WHICH THE MARINE CORPS STAFF STUDY REGARDED AS "MANDATORY.' SINCE UNIVAC
DID NOT AT THE TIME IT FIRST USED THE TERM "OPERATIONAL SOFTWARE"
EXPLICITLY DEFINE WHAT THE PHRASE WAS INTENDED TO MEAN, WE FIND IT VERY
DIFFICULT AT THIS POINT TO SAY WHICH SOFTWARE, OTHER THAN WHATEVER
SOFTWARE ROUTINES WERE NECESSARY TO OPERATE THE DEMONSTRATION HARDWARE
FOR THE BENCHMARK, CLEARLY MAY BE CONSIDERED "OPERATIONAL.'
PARAGRAPH 0124/12) OF THE RFP LISTS SORT/MERGE, EXECUTIVE AND COBOL
ROUTINES AS "MANDATORY" SOFTWARE. YOU SAY THAT THE TERM "OPERATIONAL
SOFTWARE" AT LEAST ENCOMPASSED THESE ROUTINES, AND THEREFORE, THAT THEY
HAD TO BE AVAILABLE ON APRIL 1. HOWEVER, IT IS SIGNIFICANT THAT WHILE
THE PROPOSED EQUIPMENT MUST COMPILE AND OPERATE COBOL, CENTRALIZED
PROGRAMMING MAY NOT RESULT FROM COBOL STATEMENTS, AND APPARENTLY THE
COBOL REQUIREMENT WAS INCLUDED NOT BECAUSE IT WOULD NECESSARILY BE USED
IN THE OPERATION OF THE MUMMS PROGRAM, BUT BECAUSE INCLUSION OF COBOL IS
REQUIRED BY DOD DIRECTIVE.
IN OUR VIEW, YOUR CONTENTION THAT THE RFP REQUIRED THESE THREE
"MANDATORY" AND ALLEGEDLY ,OPERATIONAL" SOFTWARE ROUTINES TO BE
AVAILABLE ON APRIL 1, 1965, RATHER THAN IN FEBRUARY OF 1966, WOULD BE
MORE PERSUASIVE IF SUCH ROUTINES WERE ESSENTIAL TO OPERATING THE
DEMONSTRATION HARDWARE IN RUNNING THE BENCHMARK. HOWEVER, IT APPEARS
THAT THE BENCHMARK PROBLEMS WERE SO DESIGNED THAT SORT/MERGE AND
EXECUTIVE ROUTINES COULD NOT BE EMPLOYED. FURTHERMORE, THE ORIGINAL
REQUIREMENT THAT THE BENCHMARK PROBLEM BE PROGRAMMED IN COBOL SOFTWARE
WAS DELETED BY THE MARINE CORPS IN ITS LETTER OF FEBRUARY 17, 1965,
ISSUED SHORTLY AFTER IT HAD AFFIRMATIVELY ANSWERED UNIVAC'S QUESTION
CONCERNING THE AVAILABILITY OF "OPERATIONAL SOFTWARE" ON APRIL 1. THUS,
IT APPEARS THAT BY URGING US TO ADOPT YOUR INTERPRETATION OF
"OPERATIONAL," YOU SEEK TO ESTABLISH FOR THE MARINE CORPS ON APRIL 1
AVAILABILITY REQUIREMENT OF SOFTWARE WHICH WAS UNNEEDED FOR ANY PURPOSE
STATED IN THE RFP UNTIL AFTER THE INSTALLATION DATE OF FEBRUARY 1966.
WE ARE UNABLE TO ACCEPT SUCH INTERPRETATION, AND MUST THEREFORE AGREE
WITH THE MARINE CORPS THAT THE ONLY SOFTWARE REQUIRED BY THE RFP TO BE
AVAILABLE ON APRIL 1 WAS THAT WHICH WAS NECESSARY TO DRIVE THE OFFEROR'S
BENCHMARK DEMONSTRATION HARDWARE.
FOR THE FOREGOING REASONS, WE MUST CONCLUDE THAT THE RECORD FAILS TO
SUPPORT YOUR CONTENTION THAT IBM'S PROPOSAL DID NOT CONFORM TO THE
MANDATORY REQUIREMENTS OF THE RFP. WHILE UNIVAC'S APPARENT
MISINTERPRETATION OF THE RFP REQUIREMENTS, AND ANY RESULTING FAILURE ON
ITS PART TO SUBMIT A PROPOSAL OFFERING A BETTER OR MORE ECONOMICAL
SYSTEM, IS REGRETTABLE, WE SEE NO BASIS UPON WHICH TO CONCLUDE THAT THE
PROCEDURES FOLLOWED BY THE PROCURING ACTIVITY AFFORD ANY SUFFICIENT
GROUND TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED TO IBM.
ACCORDINGLY, YOUR PROTEST IS DENIED.
B-157300, NOV. 19, 1965
TO PACIFIC INFRARED SYSTEMS COMPANY:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 21, 1965,
PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER
REQUEST FOR PROPOSALS (RFP) 670-96015-262, ISSUED JUNE 25, 1965, BY THE
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), GODDARD SPACE
FLIGHT CENTER, GREENBELT, MARYLAND, COVERING THE PROCUREMENT OF THREE
FLIGHT QUALIFIED STAR TRACKERS AND RELATED ITEMS. THE GROUND OF YOUR
PROTEST IS THAT, IN VIOLATION OF YOUR PROPRIETARY RIGHTS THEREIN,
INFORMATION SUBMITTED IN CONFIDENCE BY YOU TO NASA IS BEING DISCLOSED TO
THIRD PARTIES WITHOUT YOUR AUTHORITY OR CONSENT. AWARD OF A CONTRACT
UNDER THE RFP IN QUESTION HAS BEEN HELD IN ABEYANCE PENDING
CONSIDERATION OF THE MATTERS PRESENTED BY YOUR PROTEST.
IN THE BRIEF DATED JULY 23, 1965, SUBMITTED WITH ACCOMPANYING
EXHIBITS BY YOUR ATTORNEYS, VOEGELIN, BARTON, HARRIS AND CALLISTER, IT
IS ALLEGED THAT RFP 670-96015-262 DISCLOSES INFORMATION IN VIOLATION OF
THE PROPRIETARY RIGHTS OF PACIFIC INFRARED ON THE GROUND SUCH
INFORMATION HAD BEEN PREVIOUSLY SUBMITTED IN CONFIDENCE BY PACIFIC
INFRARED SYSTEMS; THAT SUCH INFORMATION WAS CONTAINED IN PACIFIC
INFRARED'S PROPOSAL P-10019, DATED AUGUST 22, 1962, WHICH WAS SUBMITTED
IN RESPONSE TO RFP A-6000, ISSUED JULY 17, 1962, BY NASA AMES RESEARCH
CENTER, MOFFETT FIELD, CALIFORNIA. IT IS ALSO ALLEGED IN THE BRIEF THAT
RFP A-6000 COVERED A REQUIREMENT FOR FIVE UNITS OF A "BORESIGHTED STAR
AND PLANET TRACKER" AND SPECIFIED TWO-PART PROPOSALS (ONE TECHNICAL AND
ONE BUSINESS) SO THE STRICTLY TECHNICAL PORTIONS COULD BE EVALUATED. IT
IS ALLEGED FURTHER THAT SOME TIME AFTER THE PROPOSALS WERE RECEIVED MR.
WHITNEY WAS ADVISED BY NASA THAT HIS PROPOSAL HAD BEEN EVALUATED
FAVORABLY; THAT MESSRS. MARION MANSON OF AMES RESEARCH CENTER AND DAVID
U. WRIGHT, JR., OF GODDARD SPACE FLIGHT CENTER VISITED THE PACIFIC
INFRARED PLANT AND TALKED AT LENGTH WITH MESSRS. WHITNEY AND GEORGE
AROYAN ABOUT THE PROPOSED TRACKER; THAT AT ALL TIMES MESSRS. MANSON AND
WRIGHT WERE FULLY AWARE THAT THE TRACKER PROPOSED BY PACIFIC INFRARED
WAS DEVELOPED WITHOUT GOVERNMENT SUPPORT AND "THAT THE DESIGN WAS
SUBMITTED SOLELY IN ORDER FOR NASA TO DETERMINE WHETHER TO AWARD PACIFIC
INFRARED A CONTRACT.' ULTIMATELY, MR. WHITNEY WAS INFORMALLY ADVISED
,THAT HIS COMPANY WAS REGARDED AS TOO SMALL TO PRODUCE THESE TRACKERS"
AND PACIFIC INFRARED'S PROPOSAL WAS NOT ACCEPTED.
THE BRIEF ALSO ALLEGES THAT "THE TRACKER DESIGN CONTAINED IN RFP
670-96015-262 EMBODIES COMPLETELY AS ITS OPERATING PRINCIPLE THE
TWO-FIELD TRACKER AND THE AROYAN FM RETICLE SUBMITTED IN THE PACIFIC
INFRARED PROPOSAL P-10019 (AND UPON WHICH PATENT APPLICATIONS ARE BEING
PROCESSED). IT IS VERY EVIDENT," IT IS CONTENDED,"THAT NASA TOOK THE
EXACT PACIFIC INFRARED DESIGN, DID CONSIDERABLE DETAILED ENGINEERING ON
IT, AND HAS NOW SENT IT TO COMPETING COMPANIES FOR BIDS.'
THE BRIEF ALLEGES FURTHER THAT UPON RECEIPT OF RFP 670-96015-262
PACIFIC INFRARED IMMEDIATELY PROTESTED TO THE CONTRACTING OFFICER AT
GODDARD; THAT IN TELEPHONE CONVERSATIONS NO ONE HAD DENIED THAT THE
PACIFIC INFRARED DESIGN WAS USED; THAT IN FACT MODELS OF THE PACIFIC
INFRARED TRACKER APPARENTLY WERE BUILT AT GODDARD AND SUCCESSFULLY
TESTED, AND THAT PACIFIC INFRARED IS INFORMED ,THAT THE PROTEST IS BEING
DENIED BECAUSE A COPY OF THE PACIFIC INFRARED TECHNICAL PROPOSAL
ALLEGEDLY WAS NOT STAMPED CONFIDENTIAL.' IT IS ALSO ALLEGED IN THE BRIEF
THAT MR. WHITNEY HAS FURNISHED INFORMATION "THAT TO THE BEST OF HIS
KNOWLEDGE SOME IF NOT ALL OF THE PROPOSAL COPIES WERE STAMPED
"PROPRIETARY" SINCE THIS IS HIS USUAL OFFICE PROCEDURE WHEN SUBMITTING
TECHNICAL PROPOSALS; " AND THAT "THE NASA PERSONNEL WHO TALKED TO HIM
SHORTLY AFTER THE PROPOSAL'S SUBMISSION WERE WELL AWARE THAT THE
PROPOSAL WAS PROPRIETARY.' THE VIEW IS EXPRESSED THEREIN THAT "IT IS
INCONCEIVABLE THAT ANYONE COULD SOLICIT A TECHNICAL PROPOSAL SUCH AS
THIS ONE, WHICH REQUIRED CONSIDERABLE DESIGN ENGINEERING WORK AND WHICH
INVOLVED ORIGINAL CONCEPTS, AND THEN BELIEVE IN GOOD FAITH THAT THE
BIDDER WAS RELINQUISHING ALL OF HIS RIGHTS TO IT IF THE BID WAS NOT
ACCEPTED.'
THE BRIEF URGES THAT THE LAW REGARDING THE RIGHTS OF A BIDDER IS VERY
CLEAR; THAT "WHEN PROPRIETARY OR CONFIDENTIAL MATERIAL IS SUBMITTED FOR
A PARTICULAR PURPOSE, SUCH AS IN RESPONSE TO A REQUEST FOR BID, THE
GOVERNMENT IS OBLIGATED TO USE THAT MATERIAL SOLELY FOR THE PURPOSE
SUBMITTED; " THAT THE GOVERNMENT "CANNOT USE THE MATERIAL FOR OTHER
PURPOSES WITHOUT PERMISSION OR WITHOUT NEGOTIATING A LICENSE.' THE
RECENT CASE OF PEDBLOC COMPANY, INC. V. UNITED STATES (CT.CL. 1963), 161
CT.CL. 369 IS CITED; ALSO DUPONT POWDER CO. V. MASLAND (1917), 244
U.S. 100; AND DECISIONS OF OUR OFFICE, B-150369, AUGUST 22, 1963, 43
COMP. GEN. 193, 9 CCF PARA. 72, 267, AND B-154079, OCTOBER 14, 1964, 6
GOVERNMENT CONTRACTOR PARA. 459 (1964).
THE CONTRACTING OFFICER APPARENTLY HAS TAKEN THE POSITION, IT IS
ALLEGED IN THE BRIEF,"THAT BECAUSE A COPY OF PACIFIC INFRARED'S
TECHNICAL PROPOSAL ALLEGEDLY CONTAINED NO STAMP ROPRIETARY," THE
GOVERNMENT WAS FREE TO APPROPRIATE IT WITHOUT COMPENSATION. * * * WHILE
WE BELIEVE," IT IS ASSERTED,"SOME IF NOT ALL OF THE COPIES OF THE
TECHNICAL PROPOSAL WERE STAMPED PROPRIETARY, THERE IS NO MAGIC IN SUCH A
STAMP; " THAT THE "TEST IS WHETHER BOTH PARTIES INTENDED THE GOVERNMENT
TO BE FREE TO USE THIS MATERIAL WITHOUT ANY OBLIGATION. BOTH THE FACTS
AND COMMON SENSE, IT IS CONTENDED,"DICTATE THAT THE ANSWER BE NO," THAT
THE MATERIAL WAS SPECIFICALLY SOLICITED IN A REQUEST FOR BIDS WHEREIN
THE BIDDER WAS REQUESTED TO PROPOSE A PRICE FOR WHICH HE WOULD PRODUCE
THE PRODUCT HE OFFERED; THAT "BOTH PARTIES KNEW PACIFIC INFRARED'S SOLE
PURPOSE IN ATTACHING ITS TECHNICAL PROPOSAL WAS TO INDUCE THE GOVERNMENT
TO AWARD IT THE CONTRACT" AND "TO ASSUME THAT PACIFIC INFRARED WOULD
SUBMIT A TECHNICAL PROPOSAL OF THIS TYPE, WHICH INVOLVED A UNIQUE DESIGN
CONCEPT AND CONSIDERABLE ORIGINAL DESIGN ENGINEERING, ON THE ASSUMPTION
THAT THE GOVERNMENT WAS FREE TO APPROPRIATE IT WITHOUT COMPENSATION AND
CONTRACT WITH OTHER PARTIES FOR ITS MANUFACTURE IS CONTRARY TO ALL
REASON.' THE VIEW IS EXPRESSED IN THE BRIEF THAT "NO GOVERNMENT EMPLOYEE
COULD HAVE BELIEVED THIS WAS THE INTENT OF PACIFIC INFRARED--- OR THE
GOVERNMENT: WHEN THE GOVERNMENT SOLICITS BIDS WHICH CALL FOR A
TECHNICAL PROPOSAL INCORPORATING ORIGINAL DESIGN," IT IS CONTENDED,"THE
CLEAR IMPLICATION IS THAT THE GOVERNMENT WILL USE THE PROPRIETARY DATA
RECEIVED ONLY FOR EVALUATING THE BID," AND IF,"AS APPARENTLY WAS THE
CASE HERE, THE GOVERNMENT LIKED THE TECHNICAL PROPOSAL BUT FELT PACIFIC
INFRARED WAS TOO SMALL A COMPANY (HARDLY A BOOST FOR SMALL BUSINESS.),
IT SHOULD HAVE NEGOTIATED A LICENSE" AS THE "LAW DOES NOT ALLOW IT TO
APPROPRIATE THE DESIGN WITHOUT COMPENSATION AND DISSEMINATE THE TRADE
SECRETS TO LARGE COMPETING MANUFACTURERS.' IN CONCLUSION, THE BRIEF
URGES THAT THE CONTRACTING OFFICER SHOULD BE REQUIRED:
"/A) TO CANCEL THE RFP;
"/B) TO RECOVER ALL DOCUMENTS DISSEMINATED AND TO DIRECT RECIPIENT
NOT TO FURTHER DISCLOSE THE MATERIAL;
"/C) TO NEGOTIATE WITH PACIFIC INFRARED EITHER FOR SOLE-SOURCE
PROCUREMENT OR FOR A LICENSE IF PACIFIC INFRARED'S DESIGNS ARE TO BE
USED.'
THE DIRECTOR OF PROCUREMENT FOR NASA HAS RECOMMENDED THAT THE PROTEST
BE DENIED, BASED ON A DETAILED REPORT DATED SEPTEMBER 27, 1965, AND ITS
ACCOMPANYING DOCUMENTS. SUBSTANTIAL DISAGREEMENT IS DISCLOSED THEREIN
WITH RESPECT TO THE ALLEGATIONS AND CONTENTIONS YOU HAVE PRESENTED.
THUS, THE REPORT CONTAINS, IN EFFECT, A GENERAL DENIAL THAT (1) PACIFIC
INFRARED'S PROPOSAL P-10019, OR ANY OF ITS COPIES, WAS MARKED WITH A
RESTRICTIVE NOTICE, (2) THAT ORAL NOTICE OF PROPRIETARY RIGHTS CLAIMED
BY PACIFIC INFRARED WAS RECEIVED BY NASA, (3) THAT MODELS OF THE PACIFIC
INFRARED TRACKER WERE BUILT AND SUCCESSFULLY TESTED AT GODDARD AND (4)
THAT THE TRACKER DESIGN CONTAINED IN RFP 670-96015-262 UTILIZES THE
CONCEPTS IN PACIFIC INFRARED'S PROPOSAL P-10019. IT IS URGED BY NASA
THAT PROPRIETARY RIGHTS OF PACIFIC INFRARED HAVE NOT BEEN VIOLATED ON
THE GROUNDS THAT PROPOSALS SUBMITTED IN RESPONSE TO A REQUEST FOR
PROPOSALS WHICH ARE NOT MARKED AS REQUIRED BY THE NASA PROCUREMENT
REGULATION ARE NOT REQUIRED TO BE PROTECTED; AND THAT PACIFIC ABANDONED
ANY PROPRIETARY RIGHTS IN DATA BY FAILING TO MARK THE SAME IN ACCORDANCE
WITH THE REGULATION.
THE RULE IS WELL ESTABLISHED THAT, INDEPENDENTLY OF THE LAW
APPLICABLE TO PATENTS AND COPYRIGHTS, THE OWNER OF PROPRIETARY
INFORMATION OR TRADE SECRETS CONSISTING OF ANY FORMULA OR PATTERN, ANY
MACHINE OR PROCESS OF MANUFACTURE, OR OF ANY DEVICE OR COMPILATION OF
INFORMATION USED IN HIS BUSINESS WHICH MAY GIVE TO HIM AN OPPORTUNITY TO
OBTAIN AN ADVANTAGE OVER COMPETITORS WHO DO NOT KNOW OR USE IT, MAY
PROTECT HIMSELF BY CONTRACT AGAINST ITS DISCLOSURE BY ONE TO WHOM IT IS
COMMUNICATED IN CONFIDENCE OR MAY RESTRICT ITS USE BY SUCH PERSON. SEE
JOHN D. PARK AND SONS CO. V. BARTMAN, 6 C.C.A. 1907, 153 F.24, CERT.DEN.
1908, 212 U.S. 588; VULCAN DETINNING CO. V. AMERICAN CAN CO., CT. OF
ERRORS AND APPEALS N.J. 1907, 67 A. 339; DUPONT POWDER CO. V. MASLAND
(1917), 244 U.S. 100; UNITED LENS CORPORATION V. DEROY LAMP CO., 7
C.C.A. 1937, 93 F.2D 969; SMITH V. DRAVO CORPORATION, 7 C.C.A. 1953,
203 F.2D 369, 376; AND VITRO CORPORATION OF AMERICA V. HALL CHEMICAL
CO., 6 C.C.A. 1958, 254 F.2D 787. AND, UNDER CERTAIN CIRCUMSTANCES A
NONDISCLOSURE AGREEMENT OR CONTRACT MAY BE IMPLIED. CF. NOELTKE V. C.
M. KEMP MFG. CO., 4 C.C.A. 1936, 80 F.2D 912, CERT. DEN. 1936, 298
U.S. 673, AND DE FILIPPIA V. CHRYSLER CORPORATION, D.C. N.Y. 1944, 53
F.SUPP. 977, AFFIRMED 2 C.C.A. 1947, 159 F.2D 478; SCHREYER V. CASCO
PRODUCTS CORP., 2 C.C.A. 1951, 190 F.2D 921, AND INTERNATIONAL
INDUSTRIES V. WARREN PETROLEUM CORP., D.C. DEL. 1956, 146 F.SUPP. 157,
177. ONE WHO LAWFULLY ACQUIRES A TRADE SECRET SUBJECT TO A CONTRACTUAL
LIMITATION OR RESTRICTION AS TO ITS USE, AND WHO USES THE SECRET FOR
PURPOSES BEYOND THE SCOPE OF THE CONTRACTUAL LIMITATION IS LIABLE FOR A
BREACH OF CONTRACT. SEE AKTIEBOLAGET BOFORZ V. UNITED STATES, C.C.A.
D.C. 1951, 194 F.2D 145; ALSO, 139 CT.CL. 642 (1957) WHERE A JUDGMENT
WAS AWARDED AGAINST THE UNITED STATES BY THE COURT OF CLAIMS.
IT SEEMS WELL ESTABLISHED ALSO THAT A CONTRACTUAL OBLIGATION TO
RESPECT THE OWNER'S RIGHT IN A TRADE SECRET USUALLY TERMINATES WITH THE
PUBLIC DISCLOSURE OF THE SECRET BY THE OWNER IN THE ABSENCE OF A
SPECIFIC CONTRACT PROVISION REQUIRING THE PROMISOR TO ADHERE TO HIS
CONTRACTUAL OBLIGATION AFTER SUCH DISCLOSURE, AND HIS RIGHT TO FURTHER
SECRECY ORDINARILY IS TERMINATED BY THE ISSUANCE OF A PATENT. SEE
PICARD V. UNITED AIRCRAFT CORPORATION, 2 C.C.A. 1942, 128 F.2D 632;
SANDLIN V. JOHNSON, 8 C.C.A. 1944, 141 F.2D 660; CONMAR PRODUCTS CORP.
V. UNIVERSAL SLIDE FASTENER CO., 2 C.C.A. 1949, 172 F.2D 150; SKOOG V.
MCCRAY REFRIGERATOR CO., 7 C.C.A. 1954, 211 F.2D 254; AND DOLLAC
CORPORATION V. MARGON CORPORATION, D.C. N.J. 1958, 164 F.SUPP. 41.
HOWEVER, NO EXCLUSIVE RIGHTS ARE VESTED IN THE INVENTOR BY THE FILING OF
A PATENT APPLICATION, GAYLOR V. WILDER, (1850), 51 U.S. 477, 493, AND
IT HAS BEEN CONSISTENTLY HELD BY THE COURTS THAT A SINGLE USE OR SALE
WITHOUT RESTRICTION OR INJUNCTION OR SECRECY BY THE INVENTOR MAY BE
SUFFICIENT TO DENY THE PROTECTION OF A PATENT TO THE INVENTOR.
METALIZING ENGINEER CO. V. KENYON BEARING AND A.P. CO., 2 C.C.A. 1946,
153 F.2D 516, CERT. DEN. 328 U.S. 840; NATIONAL WELDING E. CO. V.
HAMMON PRECISION E. CO., D.C. CALIF. 1958, 165 F.SUPP. 788; AND PIET V.
UNITED STATES, D.C. CALIF. 1959, 176 F.SUPP. 576, AFFIRMED 9 C.C.A.
1960, 283 F.2D 693. CF. THE AUTHORITIES COLLECTED IN THE ANNOTATION
170 A.L.R. 449-500.
WITH RESPECT TO THE AMES RESEARCH CENTER PROCUREMENT UNDER RFQ
A-6000, THE AVAILABLE RECORD DISCLOSES THAT THIS PROCUREMENT WAS
INITIATED BY THE PROCUREMENT OFFICER'S SINGLE PAGE LETTER DATED JULY 17,
1962, WHICH ENCLOSED A GENERAL OUTLINE OF THE "REQUIREMENTS FOR
BORESIGHTED STAR AND PLANET TRACKER" DESIRED FOR USE IN EXPERIMENTS
BEING CONDUCTED BY NASA. THE RFQ STIPULATED THAT "IT IS INTENDED TO
ENTER INTO COMPETITIVE NEGOTIATIONS LEADING TO A DEFINITIVE CONTRACT AS
SOON AS POSSIBLE AFTER RECEIPT OF PROPOSALS," AND REQUESTED THAT
PROPOSALS BE SUBMITTED BY AUGUST 10, 1962, WHICH DATE APPARENTLY WAS
EXTENDED BY AN ADDENDUM DATED AUGUST 2, 1962. THE RFQ ALSO STIPULATED
THAT "A PROPOSAL IN TWO PARTS IS DESIRED, SO THAT THE STRICTLY TECHNICAL
PORTIONS, WITHOUT PRICE REFERENCE, MAY BE DETACHED FOR SEPARATE STUDY.'
THE RFQ STIPULATED FURTHER THAT ,WE DO NOT PLAN TO ENTER INTO
DISCUSSIONS OR NEGOTIATIONS REGARDING ANY PROPOSAL UNTIL ALL CONCERNED
HAVE BECOME FAMILIAR WITH IT AND MUTUALLY ACCEPTABLE ARRANGEMENTS HAVE
BEEN MADE FOR DISCUSSIONS.' AND ALSO, THAT "QUESTIONS OF ANY NATURE
REGARDING THIS NEGOTIATION SHOULD BE DIRECTED TO GABRIEL FOX, CONTRACT
NEGOTIATOR OR THE UNDERSIGNED. (TELEPHONE YORKSHIRE 8-9411, EXTENSION
273).' NO STIPULATION WAS MADE NOR WAS IT OTHERWISE INDICATED IN THE RFQ
AND ITS ATTACHMENTS THAT THE PROPOSALS SOLICITED AND THE PROPRIETARY
INFORMATION AND DATA CONTAINED THEREIN WERE TO BE USED BY NASA OTHER
THAN FOR "STUDY" AND "COMPETITIVE NEGOTIATIONS LEADING TO A DEFINITIVE
CONTRACT.' NOR DID THE RFQ CONTAIN REFERENCES TO ANY OTHER DOCUMENTS OR
REGULATIONS.
IT HAS BEEN ADMINISTRATIVELY REPORTED THAT A TOTAL OF 70 RFQ PACKAGES
WERE ISSUED AND THAT 9 PROPOSALS WERE RECEIVED INCLUDING PACIFIC
INFRARED'S PROPOSAL P-10019 DATED AUGUST 24, 1962, AS EVIDENCED BY A
COPY THEREOF CONSISTING OF 16 PAGES OF DESCRIPTIVE MATERIAL AND
ILLUSTRATIONS FURNISHED WITH THE REPORT.
IT WAS STIPULATED IN THE INTRODUCTORY PARAGRAPH NUMBERED 1.0 OF
PROPOSAL P-10019,"THIS DOCUMENT CONSTITUTES THE TECHNICAL DISCUSSION OF
A PROPOSAL BY PACIFIC INFRARED SYSTEMS COMPANY FOR A BORE SIGHTED STAR
AND PLANT TRACKER * * * SUBMITTED TO AMES RESEARCH CENTER IN RESPONSE TO
RFP 6000.' THE PROPOSAL SETS FORTH A DETAILED DESCRIPTION OF THE
"PACIFIC INFRARED PI-3 TRACKER" ILLUSTRATED IN FIGURE 1. AN OUTLINE OF
THE COMPANY'S QUALIFICATIONS WAS ALSO SUBMITTED WITH THE PROPOSAL
INCLUDING DETAILS OF THE COMPANY'S ORGANIZATION AND FACILITIES AND ITS
PERSONNEL AND EXPERIENCE. AS WAS THE CASE IN RFQ A-6000, NO STIPULATION
OR REFERENCE WAS MADE IN THE PROPOSAL CONCERNING THE USE AND PROTECTION
OF PROPRIETARY INFORMATION AND DATA.
IT IS STATED IN THE REPORT THAT 5 COPIES OF PROPOSAL P-10019 WERE
SUBMITTED BY PACIFIC INFRARED, 3 COPIES TO AMES RESEARCH CENTER IN
RESPONSE TO RFQ A-6000, AND 2 EXTRA COPIES FURNISHED TO MR. DAVID U.
WRIGHT, JR., GODDARD SPACE FLIGHT CENTER, AS RELATED IN PACIFIC
INFRARED'S LETTER TO HIM DATED SEPTEMBER 14, 1962. BY DILIGENT SEARCH
THE AGENCY HAS BEEN ABLE TO LOCATE 3 OF THE 5 COPIES RECEIVED.
EXAMINATION THEREOF DISCLOSES NO RESTRICTIVE RESERVATIONS OR MARKINGS
AND THE REPORT POINTS OUT THAT NONE OF THE CORRESPONDENCE RELATING TO
THIS PROPOSAL CONTAINS ANYTHING "TO SUGGEST THAT ANY OF THE COPIES WERE
RESTRICTIVELY MARKED OR WERE TO BE RECEIVED IN CONFIDENCE.'
MOREOVER, THE AGENCY REPORT DISCLOSES THAT AFTER THE AWARD OF THE
CONTRACT UNDER RFQ A-6000, PACIFIC INFRARED SUBMITTED AN UNSOLICITED
PROPOSAL TO DR. NANCY ROMAN, NASA HEADQUARTERS, BY LETTER DATED JANUARY
14, 1963, PROPOSAL P-10026. THE REPORT ALSO DISCLOSES THAT PACIFIC
INFRARED WAS NOTIFIED BY LETTER DATED MARCH 19, 1964,"FROM T. L. K.
SMALL, DIRECTOR OF GRANTS AND RESEARCH CONTRACTS DIVISION, NASA
HEADQUARTERS, THAT THE PROSPECTS FOR INVESTIGATION UNDER PACIFIC'S
PROPOSAL P-10026 WERE NOT SUFFICIENT TO WARRANT FURTHER CONSIDERATION.'
AS EVIDENCED BY A COPY FURNISHED WITH THE REPORT, THIS UNSOLICITED
PROPOSAL DESCRIBED THE BASIC STAR TRACKER OF PROPOSAL F-10019, WITH
ALLEGED MODIFICATIONS AND IMPROVEMENTS, AND AS WAS THE CASE IN PROPOSAL
P-10019, IT CONTAINED NO STIPULATIONS OR RESERVATIONS CONCERNING THE USE
AND PROTECTION OF PROPRIETARY INFORMATION AND DATA.
HENCE, IT IS CONTENDED BY THE ADMINISTRATIVE AGENCY THAT THE
AVAILABLE RECORD DOES NOT SUPPORT THE INFORMATION FURNISHED BY MR.
WHITNEY TO THE EFFECT THAT SOME OF NOT ALL OF THE COPIES OF PROPOSAL
P-10019 WERE STAMPED "PROPRIETARY," IN ACCORDANCE WITH HIS USUAL OFFICE
PROCEDURE WHEN SUBMITTING TECHNICAL PROPOSALS. THE ADMINISTRATIVE
AGENCY URGES THEREFORE THAT THE CONCLUSION SEEMS REASONABLY JUSTIFIED---
AND WE ARE INCLINED TO AGREE--- THAT NONE OF THE COPIES OF PROPOSAL
P-10019 WERE STAMPED "PROPRIETARY.'
AS A PART OF THE EVALUATION OF THE PROPOSALS RECEIVED IN RESPONSE TO
RFQ A-6000, THE AGENCY REPORTS, PLANT SURVEYS WERE CONDUCTED FOR THE
PURPOSE OF EVALUATING THE IN-HOUSE CAPACITY OF THE PROSPECTIVE
CONTRACTORS. THE SURVEY OF PACIFIC INFRARED'S PLANT WAS MADE BY MESSRS.
MARION HANSON OF NASA-AMES AND DAVID U. WRIGHT, JR., OF GSFC ON
SEPTEMBER 13, 1962. THEREAFTER, TECHNICAL REVIEW ELIMINATED ALL BUT TWO
OF THE PROPOSALS, PACIFIC INFRARED'S BEING ONE OF THOSE ELIMINATED. THE
AGENCY ALLEGES, HOWEVER, THAT NO NEGOTIATIONS WERE CONDUCTED WITH
PACIFIC INFRARED AND NO DISCUSSIONS WERE HAD OTHER THAN THE IN-HOUSE
CAPABILITY SURVEY BY MESSRS. HANSON AND WRIGHT, WHOSE AUTHORITY AND
FUNCTION AT THE TIME DID NOT INCLUDE EVALUATION OF PACIFIC INFRARED'S
TECHNICAL PROPOSAL. A CONTRACT WAS NEGOTIATED WITH ONE OF THE FIRMS
WHOSE PROPOSAL WAS DETERMINED ACCEPTABLE AND ALL INTERESTED PARTIES
INCLUDING PACIFIC INFRARED WERE SO ADVISED BY LETTER DATED NOVEMBER 15,
1962, STATING THAT "SELECTION OF THE CONTRACTOR WAS MADE ON A
COMBINATION OF TECHNICAL APPROACH AND PRICE.' THE AGENCY STATES THAT THE
STAR TRACKER DEVELOPMENT UNDER THAT CONTRACT IS CONTINUING; THAT IT IS
IN NO WAY SIMILAR TO THE STAR TRACKER DISCLOSED IN PACIFIC INFRARED'S
PROPOSAL P-10019, AND POINTS OUT THAT NO ALLEGATIONS HAVE BEEN MADE THAT
THE AWARD WAS IMPROPER OR THAT THE STAR TRACKER BEING DEVELOPED UNDER
THAT CONTRACT IS PROPRIETARY TO PACIFIC INFRARED.
WHILE IT IS TRUE, THE AGENCY'S REPORT EXPLAINS, THAT THERE WAS SOME
CONCERN AT THE TIME OF EVALUATING THE PROPOSALS AS TO WHETHER OR NOT
PACIFIC HAD ADEQUATE IN-HOUSE PRODUCTION FACILITIES AND PERSONNEL TO
MEET THE REQUIREMENTS OF THE PROPOSED CONTRACT,"THE TECHNICAL
CONSIDERATIONS THAT LED TO THE ELIMINATION OF THE PACIFIC PROPOSAL WAS
THE FACT THAT THE PACIFIC TRACKER HAD BEEN ONLY PROPOSED AND HAD NOT AT
THAT TIME ACTUALLY BEEN BUILT AND TESTED, AND THAT A TWO-CHANNEL OR DUAL
OPTIC SYSTEM WAS CONSIDERED LESS DESIRABLE THAN A SINGLE CHANNEL SYSTEM
FOR THE PURPOSES OF THE PROPOSED PROCUREMENT.' THESE CONSIDERATIONS, THE
AGENCY'S REPORT STATES, WERE ALSO FACTORS IN
THE ELIMINATION OF OTHER PROPOSALS AND THEREFORE THE ALLEGATIONS THA
THE CONTRACT WAS DENIED SOLELY ON THE BASIS PACIFIC WAS CONSIDERED TOO
SMALL OR THAT NASA OFFICIALLY INFORMED REPRESENTATIVES OF PACIFIC
INFRARED THAT PROPOSAL P-10019 HAD BEEN "FAVORABLY EVALUATED" BUT THAT
THE "COMPANY WAS REGARDED AS TOO SMALL TO PRODUCE THESE TRACKERS"
APPARENTLY ARE WITHOUT JUSTIFICATION.
IN SUPPORT OF THE AGENCY'S DENIAL OF YOUR CONTENTIONS URGING THAT
NASA RECEIVED ORAL NOTICE OF THE PROPRIETARY RIGHTS CLAIMED BY PACIFIC
INFRARED BASED PRIMARILY ON THE PLANT SURVEY MADE BY MESSRS. HANSON AND
WRIGHT, AS RELATED ABOVE, A STATEMENT BY MR. WRIGHT DATED AUGUST 13,
1965, AND A STATEMENT ON BEHALF OF MR. HANSON DATED AUGUST 19, 1965, BY
MR. ROBERT F. KEMPF OF THE OFFICE OF PATENT COUNSEL, GODDARD SPACE
FLIGHT CENTER, HAVE BEEN SUBMITTED. THESE STATEMENTS ARE TO THE EFFECT
THAT AFTER THE ELAPSE OF 3 YEARS, MESSRS. WRIGHT AND HANSON HAVE NO
DEFINITE RECOLLECTION AS TO WHETHER OR NOT THEY WERE ADVISED THAT
PACIFIC INFRARED CONSIDERED THE STAR TRACKER A PROPRIETARY ITEM. ON THE
OTHER HAND, YOU HAVE FURNISHED NO EVIDENCE TO ESTABLISH YOUR CONTENTIONS
AND THERE IS NOTHING IN THE RECORD TO SHOW THAT SUCH ADVICE WAS
COMMUNICATED TO THE PROCUREMENT OFFICER.
WITH RESPECT TO THE ALLEGATIONS THAT "MODELS OF THE PACIFIC INFRARED
TRACKER APPARENTLY WERE BUILT AT GODDARD AND SUCCESSFULLY TESTED" AND
THAT THE TRACKER DESIGN IN RFP 670-96015-262 UTILIZES THE CONCEPTS IN
PACIFIC INFRARED'S PROPOSAL P-10019, THE REPORT DISCLOSES THAT THE
,MODELS BUILT AND TESTED WERE OF THE TRACKER DESIGN CALLED FOR BY
SPECIFICATION 67-60, WHICH HAS SUBSTANTIAL DEPARTURES FROM THE PACIFIC
DESIGN.' THE DESIGN CALLED FOR BY SPECIFICATION 67-60, TO WHICH STAR
TRACKERS CALLED FOR IN RFP 670-96015-262 ARE TO BE MADE, IS REFERRED TO
AS THE GODDARD TRACKER IN CONTRAST TO THE PACIFIC TRACKER. ONLY
PRELIMINARY TESTS OF THE GODDARD TRACKER HAVE BEEN MADE. "THE ENGINEERS
DIRECTLY INVOLVED WITH THE DEVELOPMENT OF THE GODDARD STAR TRACKER
MAINTAIN THEY DEVELOPED THE GODDARD TRACKER DESIGN INDEPENDENTLY, BASED
ON THEIR INVESTIGATION OF THE PRIOR ART, AND THAT THE FEATURES WHICH THE
GODDARD STAR TRACKER HAS IN COMMON WITH THE PACIFIC TRACKER RESULTS FROM
SIMILARITY OF CONCEPT RATHER THAN FROM DIRECT COPYING FROM THE PACIFIC
PROPOSAL; " THAT THE TRACKER DEVELOPED AT GODDARD IS BASICALLY A
GIMBALLED SYSTEM, WHEREAS THE PACIFIC TRACKER DESCRIBED IN PROPOSAL
P-10019 IS A BORESIGHTED OR NONGIMBALLED TRACKER. "IT IS HIGHLY
QUESTIONABLE," THE REPORT STATES,"THAT THE BORESIGHTED STAR TRACKER OF
PACIFIC PROPOSAL P-10019 WOULD BE ACCEPTABLE FOR THE INTENDED
APPLICATION" OF THE GODDARD TRACKER.
WITH RESPECT TO THE CONTENTIONS CONCERNING THE ASSERTED PROPRIETARY
RIGHTS OF PACIFIC INFRARED THE ADMINISTRATIVE REPORT ALLEGES THAT THE
FIRST NOTICE RECEIVED BY THE PROCURING AGENCY PERTAINING THERETO WAS A
TELEPHONE CALL TO THE CONTRACTING OFFICER ON JULY 2, 1965, FROM MR.
WHITNEY FOLLOWED BY HIS LETTER DATED JULY 8, 1965, STATING IN PART AS
FOLLOWS:
"INSPECTION OF THIS DESIGN DISCLOSES THAT YOU HAVE BASED THE
OPERATION OF THIS TRACKER ON A RETICLE SYSTEM WHICH IS PROPRIETARY TO
THIS COMPANY, AND WHICH WAS SUBMITTED TO NASA, AMES RESEARCH CENTER ON A
PROPRIETARY BASIS AS OUR TRACKER PI-3 IN RESPONSE TO THEIR RFQ
SPECIFICATION A-6000, DATED 17 JULY 1962. AT THAT TIME PACIFIC INFRARED
WAS SERIOUSLY CONSIDERED FOR THAT AWARD. MR. MARION HANSON OF AMES AND
MR. DAVID U. WRIGHT, JR. OF YOUR CENTER VISITED US, AND TALKED OVER OUR
DEVICE IN DETAIL. AS WE SUBSEQUENTLY UNDERSTOOD THE MATTER, WE DID NOT
RECEIVE THAT AWARD BECAUSE OUR COMPANY WAS THOUGHT TOO SMALL AND TOO NEW
TO HANDLE THE JOB.
"IT IS MY UNDERSTANDING, BASED UPON A CONVERSATION LAST WEEK WITH MR.
WRIGHT, THAT NASA GODDARD HAS MANUFACTURED SEVERAL OF THESE PACIFIC
INFRARED TRACKERS IN-HOUSE, AND THAT WITH THIS PROCUREMENT THEY INTEND
TO START BUYING MORE FROM PRIVATE INDUSTRY.
"PLEASE BE ADVISED THAT THE RETICLE AND TRACKER SYSTEM DESCRIBED IN
OUR PROPOSAL P-10019, AND EMBODIED IN YOUR TRACKER DESIGN, ASSEMBLY
DRAWING NO. GH 1052940 IS PROPRIETARY TO PACIFIC INFRARED SYSTEMS CO.
THIS COMPANY IS PROCEEDING FOR PATENT COVERAGE ON THIS RETICLE AND
TRACKING SYSTEM.
"WE ARE PLEASED THAT YOU HAVE FOUND THE DESIGN USEFUL, AND WE ARE
WILLING TO NEGOTIATE A NON-EXCLUSIVE, ROYALTY-BEARING LICENSE TO PERMIT
ITS CONTINUED USE. WE BELIEVE, HOWEVER, THAT THE RELEASE OF THIS
INFORMATION TO OUR COMPETITORS, WHILE DOUBTLESS INADVERTENT, HAS DAMAGED
THE COMPETITIVE POSITION OF THIS COMPANY. WE ASK THEREFORE THAT YOU
WITHDRAW THE RFP AS SOON AS POSSIBLE.
"IF NASA STILL REQUIRES THESE TRACKERS, PACIFIC INFRARED WILL BE
HAPPY TO BID THEM TO DESIGN OF ASSEMBLY DRAWING NO. GH 1052940 AND ITS
SUBSIDIARY DRAWINGS ON A SOLE-SOURCE BASIS.'
BY LETTER DATED JULY 21, 1965, DENYING THAT THE GODDARD STAR TRACKER
EMBODIED THE PACIFIC INFRARED DESIGN, GODDARD SPACE FLIGHT CENTER
ADVISED MR. WHITNEY AS FOLLOWS:
"AN INVESTIGATION CONDUCTED BY THE CONTRACTING OFFICER IN CONJUNCTION
WITH THE OFFICE OF PATENT COUNSEL, INITIATED AS A RESULT OF YOUR LETTER
OF JULY 8, 1965, RESULTS IN OUR WILLINGNESS TO CONSIDER THE POSSIBILITY
OF OBTAINING A LICENSE FOR ANY PATENT RIGHTS THAT PACIFIC INFRARED
SYSTEMS MAY HAVE COVERING THE STAR TRACKER DESIGN OF THE SUBJECT
PROCUREMENT. HOWEVER, BEYOND THE AMBIT OF ANY POSSIBLE PATENT
PROTECTION, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT THE
GODDARD-DESIGNED STAR TRACKER, AS EMBODIED IN ASSEMBLY DRAWING NO. GH
1052940, IS PROPRIETARY TO PACIFIC INFRARED SYSTEMS.
ACCORDINGLY, THERE IS NO JUSTIFICATION FOR WITHDRAWING THE RFP AND
NEGOTIATING WITH PACIFIC INFRARED SYSTEMS ON A SOLE-SOURCE BASIS. WE
WILL, OF COURSE, BE HAPPY TO CONSIDER YOUR PROPOSAL ON A COMPETITIVE
BASIS.'
IN ADDITION TO THE CONTENTIONS RELATED ABOVE, IT IS URGED IN THE
ADMINISTRATIVE REPORT THAT PARAGRAPH 3.109 OF THE NASA PROCUREMENT
REGULATION PROVIDES THAT A FIRM WHICH DESIRES TO RESTRICT THE USE OF
DATA SUBMITTED WITH A PROPOSAL IN RESPONSE TO A REQUEST FOR PROPOSALS
SHALL MARK THE DATA WITH A PRESCRIBED LEGEND; THAT PROPOSALS SUBMITTED
IN RESPONSE TO A REQUEST FOR PROPOSALS WHICH ARE NOT SO MARKED NEED NOT
BE PROTECTED; AND THAT BY FAILING TO MARK PROPOSAL P-10019 AS REQUIRED
BY THIS REGULATION PACIFIC ABANDONED ANY PROPRIETARY RIGHTS IN THE DATA
SUBMITTED IN THE PROPOSAL. IT IS STATED IN THE REPORT THAT PARAGRAPH
3.109 OF THE NASA PROCUREMENT REGULATION IS SUBSTANTIALLY SIMILAR TO A
CORRESPONDING PROVISION WHICH HAS BEEN CONTAINED IN THE ARMED SERVICES
PROCUREMENT REGULATION (ASPR) WITH SOME MODIFICATIONS SINCE THE INITIAL
PUBLICATION THEREOF IN REVISION NO. 17 OF ASPR DATED SEPTEMBER 7, 1956,
AND NOW APPEARING AS PARAGRAPH 3-506 OF ASPR. PARAGRAPH 3.109 OF THE
NASA PROCUREMENT REGULATION, IT IS STATED, WAS FIRST PUBLISHED BY
TRANSMITTAL SHEET (TS) 70 AS A PART OF CHAPTER 18 OF THE NASA MANAGEMENT
MANUAL, EFFECTIVE MARCH 1, 1960, AND HAS BEEN IN EFFECT IN ITS PRESENT
FORM SINCE THAT DATE.
THE PROVISIONS OF THE "NEW NASA PROCUREMENT REGULATION, JANUARY 1964
EDITION (NPC 400)," WHICH IS AVAILABLE WITH REVISIONS FROM THE
SUPERINTENDENT OF DOCUMENTS, GOVERNMENT PRINTING OFFICE, ARE PUBLISHED
IN TITLE 41 OF THE CODE OF FEDERAL REGULATIONS, 41 CFR, CHAPTER 18,
REVISED AS OF JANUARY 1, 1965, PARAGRAPH 3.109 THEREOF PROVIDES AS
FOLLOWS:
"S18-3.109 RESTRICTIONS ON DISCLOSURE OF DATA IN PROPOSALS.
"/A) REQUESTS FOR PROPOSALS MAY REQUIRE THE OFFEROR TO SUBMIT WITH
HIS PROPOSAL DATA WHICH MAY INCLUDE A DESIGN OR PLAN FOR ACCOMPLISHING
THE OBJECTIVES OF THE PROCUREMENT. SUCH DATA MAY INCLUDE INFORMATION
WHICH THE OFFEROR DOES NOT WANT DISCLOSED TO THE PUBLIC OR USED BY THE
GOVERNMENT FOR ANY PURPOSE OTHER THAN EVALUATION OF THE PROPOSALS.
OFFERORS SHALL MARK EACH SHEET OF DATA WHICH THEY SO WISH TO RESTRICT
WITH THE LEGEND SET FORTH BELOW:
"THIS DATA, FURNISHED IN RESPONSE TO RFP NO. ------- , SHALL NOT BE
DISCLOSED OUTSIDE THE GOVERNMENT OR BE DUPLICATED, USED, OR DISCLOSED IN
WHOLE OR IN PART FOR ANY PURPOSE OTHER THAN TO EVALUATE THE PROPOSAL
PROVIDED, THAT IF A CONTRACT IS AWARDED TO THIS OFFEROR AS A RESULT OF
OR IN CONNECTION WITH THE SUBMISSION OF SUCH DATA, THE GOVERNMENT SHALL
HAVE THE RIGHT TO DUPLICATE, USE, OR DISCLOSE THIS DATA TO THE EXTENT
PROVIDED IN THE CONTRACT. THIS RESTRICTION DOES NOT LIMIT THE
GOVERNMENT'S RIGHT TO USE INFORMATION CONTAINED IN SUCH DATA IF IT IS
OBTAINED FROM ANOTHER SOURCE. (DECEMBER 1962)
"CONTRACTING OFFICERS SHALL NOT REFUSE TO CONSIDER ANY PROPOSAL
MERELY BECAUSE DATA SUBMITTED WITH THAT PROPOSAL IS SO MARKED. DATA SO
MARKED SHALL BE USED ONLY TO EVALUATE PROPOSALS AND SHALL NOT BE
DISCLOSED OUTSIDE THE GOVERNMENT WITHOUT THE WRITTEN PERMISSION OF THE
OFFEROR EXCEPT UNDER THE CONDITIONS PROVIDED IN THE LEGEND. IF IT IS
DESIRED TO DUPLICATE, USE, OR DISCLOSE THE DATA OF THE OFFEROR TO WHOM
THE CONTRACT IS AWARDED FOR PURPOSES OTHER THAN TO EVALUATE THE
PROPOSAL, THE CONTRACT SHOULD SO PROVIDE.
"/B) THE PROVISIONS OF PARAGRAPH (A) OF THIS SECTION DO NOT APPLY TO
PROCUREMENT BY FORMAL ADVERTISING. HOWEVER, SEE SEC. 18-2.404-4 OF THIS
CHAPTER WITH RESPECT TO PUBLIC DISCLOSURE OF DESCRIPTIVE LITERATURE OR
MATERIAL SUBMITTED BY A BIDDER ON A RESTRICTIVE BASIS.'
WITH SPECIFIC REFERENCE TO "DISSEMINATION OF PROCUREMENT
INFORMATION," PARAGRAPH 3.106 OF THE NASA PROCUREMENT REGULATION AS
MODIFIED BY REV. 4, DATED MAY 31, 1965, PROVIDES IN SUBPARAGRAPH 3,
AS FOLLOWS:
"3.106-3 AWARD INFORMATION TO UNSUCCESSFUL OFFERORS.
"/A) PRE-AWARD NOTICE OF UNACCEPTABLE OFFERS. THE FOLLOWING POLICIES
AND PROCEDURES SHALL BE OBSERVED IN MAKING INFORMATION AVAILABLE TO
UNSUCCESSFUL OFFERORS:
"/I) EXCEPT AS PROVIDED IN (II) BELOW, IN ANY PROCUREMENT IN EXCESS
OF $10,000 IN WHICH IT APPEARS THAT THE PERIOD OF EVALUATION OF
PROPOSALS IS LIKELY TO EXCEED 30 DAYS OR IN WHICH A LIMITED NUMBER OF
OFFERORS HAS BEEN SELECTED FOR ADDITIONAL NEGOTIATION, THE CONTRACTING
OFFICER, UPON DETERMINATION THAT A PROPOSAL IS UNACCEPTABLE, SHALL
PROVIDE PROMPT NOTICE OF THE FACT TO THE OFFEROR SUBMITTING THE
PROPOSAL. SUCH NOTICE NEED NOT BE GIVEN WHERE DISCLOSURE WILL PREJUDICE
THE GOVERNMENT'S INTEREST OR WHERE THE PROPOSED CONTRACT IS:
"/A) NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (4), (5), OR (6) (SEE
3.204, 3.205, OR 3.206):
"/B) NEGOTIATED WITH A FOREIGN SUPPLIER WHEN ONLY FOREIGN SOURCES OF
SUPPLIES OR SERVICES HAVE BEEN SELECTED.
"IN ADDITION TO STATING THAT THE PROPOSAL HAS BEEN DETERMINED
UNACCEPTABLE, NOTICE TO THE OFFEROR SHALL INDICATE, IN GENERAL TERMS,
THE BASIS FOR SUCH DETERMINATION AND SHALL ADVISE THAT, SINCE FURTHER
NEGOTIATION WITH HIM CONCERNING THIS PROCUREMENT IS NOT CONTEMPLATED, A
REVISION OF HIS PROPOSAL WILL NOT BE CONSIDERED.
"/II) IN THE CASE OF PROCUREMENTS FOR WHICH A SOURCE EVALUATION BOARD
HAS BEEN APPOINTED AND ONE OR MORE THAN ONE OFFEROR HAS BEEN SELECTED
FOR NEGOTIATIONS, THOSE OFFERORS NOT SELECTED FOR EITHER PRELIMINARY
NEGOTIATIONS OR FINAL NEGOTIATIONS WILL BE NOTIFIED, UPON ELIMINATION BY
THE SOURCE SELECTION OFFICIAL, OF THAT FACT IN WRITING.
"/B) POST-AWARD NOTICE OF UNACCEPTED OFFERS.
"/1) PROMPTLY AFTER MAKING ALL AWARDS IN ANY PROCUREMENT IN EXCESS OF
$10,000, THE CONTRACTING OFFICER SHALL GIVE WRITTEN NOTICE TO THE
UNSUCCESSFUL OFFERORS THAT THEIR PROPOSALS WERE NOT ACCEPTED, EXCEPT
THAT SUCH NOTICE NEED NOT BE GIVEN WHERE NOTICE HAS BEEN PROVIDED
PURSUANT TO (A) ABOVE OR THE CONTRACT IS NEGOTIATED PURSUANT TO 10
U.S.C. 2304 (A) (4), (5), OR (6) (SEE 3.204, 3.205, OR 3.206), OR IS
NEGOTIATED WITH A FOREIGN SUPPLIER WHEN ONLY FOREIGN SOURCES OF SUPPLIES
OR SERVICES HAVE BEEN SOLICITED. SUCH NOTICE SHALL ALSO INCLUDE:
"/I) THE NUMBER OF PROSPECTIVE CONTRACTORS SOLICITED;
"/II) THE NUMBER OF PROPOSALS RECEIVED;
"/III) THE NAME AND ADDRESS OF EACH OFFEROR RECEIVING AN AWARD; AND
"/IV) THE ITEMS, QUANTITIES, AND UNIT PRICES OF EACH AWARD; PROVIDED
THAT, WHERE THE NUMBER OF ITEMS OR OTHER FACTORS MAKES THE LISTING OF
UNIT PRICES IMPRACTICABLE, ONLY THE TOTAL CONTRACT PRICE NEED BE
FURNISHED.
"ADDITIONAL INFORMATION AS TO WHY AN OFFEROR'S PROPOSAL WAS NOT
ACCEPTED SHOULD BE PROVIDED TO THE OFFEROR UPON HIS WRITTEN REQUEST TO
THE CONTRACTING OFFICER, EXCEPT WHERE THE PRICE INFORMATION IN (IV)
ABOVE READILY REVEALS SUCH REASON, BUT IN NO EVENT WILL ANY OFFEROR'S
COST BREAKDOWN, PROFIT, OVERHEAD RATES, TRADE SECRETS, MANUFACTURING
PROCESSES AND TECHNIQUES, OR OTHER CONFIDENTIAL BUSINESS INFORMATION BE
DISCLOSED TO ANY OTHER OFFEROR.
"/2) IN PROCUREMENTS OF $10,000 OR LESS AND SUBJECT TO THE EXCEPTIONS
IN (1) ABOVE, THE INFORMATION DESCRIBED IN (1) ABOVE SHALL BE FURNISHED
TO UNSUCCESSFUL OFFERORS UPON REQUEST.
"/C) CLASSIFIED INFORMATION. CLASSIFIED INFORMATION SHALL BE
FURNISHED ONLY IN ACCORDANCE WITH REGULATIONS GOVERNING CLASSIFIED
INFORMATION.
"/D) DEBRIEFING. IT IS NASA POLICY TO PROVIDE A DEBRIEFING TO
UNSUCCESSFUL OFFERORS IN COMPETITIVE PROCUREMENTS WHERE SOURCE
EVALUATION BOARD PROCEDURES ARE EMPLOYED AND WHEN REQUESTED IN WRITING.
SUCH DEBRIEFING SHOULD BE CONFINED TO A DISCUSSION OF THE UNSUCCESSFUL
OFFEROR'S PROPOSAL IN RELATION TO THE GOVERNMENT'S REQUIREMENT. CARE
SHOULD BE TAKEN TO AVOID COMPARISON OF ONE COMPANY'S PROPOSAL WITH
ANOTHER AND DISCLOSURE OF INFORMATION CONTAINED IN OTHER OFFERS OR THE
GOVERNMENT'S ESTIMATE. THE POLICIES AND PROCEDURES GOVERNING DEBRIEFING
ARE MORE FULLY SET FORTH IN NASA MANAGEMENT MANUAL 3-3-15A.'
IT IS CONTENDED IN THE REPORT THAT THE PURPOSE AND INTENT OF ASPR
3-109, AND LIKEWISE PARAGRAPH 3.109 OF THE NASA PROCUREMENT REGULATION,
"WAS TO PROTECT ONLY THAT DATA, SUBMITTED WITH A PROPOSAL IN RESPONSE TO
A REQUEST FOR PROPOSALS, WHICH WAS MARKED WITH THE PRESCRIBED LEGEND,"
THAT THE REGULATION IS A "MATERIAL FACT FOR CONSIDERATION IN DETERMINING
WHETHER DATA SUBMITTED BY A PROPOSER IN A CONFIDENTIAL DISCLOSURE UNDER
AN IMPLIED CONTRACT.' IN A "STATEMENT OF THE LAW" ACCOMPANYING THE
REPORT IT IS POINTED OUT THAT THE DECISIONS OF OUR OFFICE REFERRED TO IN
THE BRIEF SUBMITTED IN SUPPORT OF YOUR PROTEST MAY BE DISTINGUISHED ON
THE GROUND THEY DID NOT INVOLVE A PROPOSAL SUBMITTED IN RESPONSE TO AN
RFP.
THE NASA PROCUREMENT REGULATIONS WERE ISSUED PURSUANT TO TH BOARD
AUTHORITY GRANTED THE ADMINISTRATION UNDER SECTION 203 (B) (1) OF THE
NATIONAL AERONAUTICS AND SPACE ACT OF 1958, 42 U.S.C. 2473 (B) (1), "TO
MAKE, PROMULGATE, ISSUE, RESCIND, AND AMEND RULES AND REGULATIONS
GOVERNING THE MANNER OF ITS OPERATIONS AND THE EXERCISE OF THE POWERS
VESTED IN IT BY LAW.' ALSO, PURSUANT TO SECTION 301 (B) OF THE NASA ACT
OF 1958, SECTIONS 2302 (1) AND 2303 (A) OF TITLE 10 U.S. CODE WERE
AMENDED SO AS TO PROVIDE, IN EFFECT, THAT NASA PROCUREMENT IS SUBJECT TO
THE PROVISIONS OF CHAPTER 137, TITLE 10 OF THE U.S. CODE COVERING
"PROCUREMENT GENERALLY" BY THE ARMED FORCES. SEE THE CASES IN SUPPORT
OF THE GENERAL PROPOSITION THAT REGULATIONS PROMULGATED PURSUANT TO
STATUTORY AUTHORITY WHICH ARE CONSISTENT WITH THE STATUTORY PURPOSES AND
INTENT HAVE THE FORCE AND EFFECT OF LAW, STANDARD OIL CO. V. JOHNSON,
316 U.S. 481 (1942); LESLIE MILLER, INC. V. ARKANSAS, 352 U.S. 187
(1956); CALIFORNIA COMM-N. V. UNITED STATES, 355 U.S. 534, 542 (1958);
CAFETERIA WORKERS V. MCELROY, 367 U.S. 886, 890 (1961); PAUL V.
UNITED STATES, 371 U.S. 245, 250-255 (1963); AND UNITED STATES V.
GEORGIA PUB. SERV. COMM-N., 371 U.S. 285, 288-293 (1963). CF. G. L.
CHRISTIAN AND ASSOCIATES V. UNITED STATES, DECIDED BY THE COURT OF
CLAIMS, JANUARY 11, 1963, 312 F.2D 418; RECONSIDERED JULY 12, 1963, 320
F.2D 345, CERT. DEN. 375 U.S. 954.
AS CONTENDED BY THE AGENCY IT APPEARS THAT NASA PROCUREMENT
REGULATION 3.109 AND ASPR 3-506.1 ARE REASONABLE REGULATIONS PROMULGATED
FOR THE PURPOSE OF FACILITATING THE OPERATIONS OF THE GOVERNMENT. THE
AGENCY POINTS OUT THAT THESE REGULATIONS SAY THAT IF AN OFFEROR DOES NOT
WANT HIS DATA DISCLOSED OR USED FOR ANY PURPOSE OTHER THAN EVALUATION OF
THE PROPOSAL, HE SHALL MARK THE DATA WITH THE LEGEND PRESCRIBED BY THE
REGULATIONS. "IF HE DOES NOT WORK THE DATA AS PRESCRIBED," IT IS
CONTENDED,"THERE IS AN IMPLIED CONTRACT IN FAVOR OF THE GOVERNMENT THAT
THE OFFEROR IS NOT INVOKING THE CONFIDENTIAL RELATIONSHIP AUTHORIZED,
EITHER BECAUSE THE DATA CONTAINS NOTHING PROPRIETARY OR BECAUSE THE
OFFEROR DOES NOT WISH TO ASSERT SUCH RIGHT" AND THAT "ON THE OTHER HAND,
WHEN THE OFFEROR DOES MARK THE DATA AS PRESCRIBED, THE IMPLIED CONTRACT
ESTABLISHING THE CONFIDENTIAL RELATIONSHIP IS ESTABLISHED.' THE AGENCY
URGES THAT "IT WOULD GREATLY COMPLICATE THE WORK OF THE ADMINISTRATIVE
BRANCH OF THE GOVERNMENT IF IT MUST PROVIDE SAFEGUARDS AGAINST THE
IMPROPER, UNCONSCIOUS OR INADVERTENT USE OF EVERY PROPOSAL SUBMITTED TO
IT UNDER A REQUEST FOR PROPOSALS OR AN INVITATION FOR BIDS.' THE VIEW IS
EXPRESSED BY THE AGENCY "THAT THE REGULATION NOT ONLY CODIFIES THE LAW,
BY REQUIRING DATA DESIRED TO BE PROTECTED TO BE RESTRICTIVELY MARKED,
BUT ALSO STRIKES THE BEST BALANCE IN THE PUBLIC INTEREST.' AND WITH
RESPECT TO REFERENCES IN DECISIONS OF OUR OFFICE IN CASES CHARACTERIZED
AS "SO-CALLED "CONFIDENTIAL RELATIONSHIP" CASES TO ANOTHER REGULATION,
ASPR 3-507 (B) (V)" WHICH CONTAINS PROVISIONS SUBSTANTIALLY THE SAME AS
NASA PROCUREMENT REGULATION 3.106-E (B), QUOTED ABOVE, THE POSITION IS
TAKEN IN THE AGENCY'S "STATEMENT OF THE LAW" THAT "NASA DOES NOT REGARD
PARAGRAPH 3.106-3 (B) OF ITS REGULATION AS LIMITING OR MODIFYING NASA PR
3.109" ON THE BASIS "TECHNICAL DATA RECEIVED UNDER A PROPOSAL WHICH IS
NOT MARKED AS PROVIDED IN 3.109 DOES NOT QUALIFY AS A "TRADE SECRET,
MANUFACTURING PROCESS OR TECHNIQUE," AS THESE TERMS ARE USED IN
PARAGRAPH 3.106-3 (B). IT IS ONLY WHEN THEY ARE RESTRICTIVELY MARKED,"
IT IS CONTENDED,"THAT THE PROHIBITION OF PARAGRAPH 3.106-3 (B) APPLIES.'
WE DO NOT AGREE THAT PARAGRAPH 3.106-3 (B) OF THE NASA PROCUREMENT
REGULATION MAY BE GIVEN THE BROAD CONSTRUCTION ADMINISTRATIVELY
SUGGESTED. CERTAINLY, THE TERM "TRADE SECRETS" AS THIS TERM IS
ORDINARILY UNDERSTOOD EMBRACES TECHNICAL DESIGNS AS WELL AS
MANUFACTURING PROCESSES AND TECHNIQUES; AND WHEN "TRADE SECRETS" ARE
OFFERED FOR EVALUATION IN PROPOSALS SUBMITTED IN RESPONSE TO AN RFQ OR
INVITATION FOR BIDS COVERING GOVERNMENT REQUIREMENTS, THEY PROPERLY MAY
NOT BE DISCLOSED OR USED BY THE GOVERNMENT WITHOUT DUE CONSIDERATION OF
THE RIGHTS OF THE COMPETING OFFERORS INVOLVED. SEE, IN THIS CONNECTION,
FEDERAL COMMUNICATIONS COMMISSION V. COHN (D.C. N.Y. 1957), 154 F.SUPP.
899, 912, WHERE THE COURT REFERS TO THE PROVISIONS OF 18 U.S.C. 1905,
MENTIONED IN YOUR BRIEF,"PROHIBITING OFFICERS OR EMPLOYEES OF FEDERAL
AGENCIES FROM DISCLOSING CONFIDENTIAL INFORMATION RECEIVED BY THEM "IN
ANY MANNER OR TO ANY EXTENT NOT AUTHORIZED BY LAW.'
CF. OUR DECISION OF SEPTEMBER 13, 1965, B-154079, AND THE AUTHORITIES
CITED THEREIN. SEE, ALSO, THE DECISIONS OF THE UNITED STATES COURT OF
APPEALS, DISTRICT OF COLUMBIA CIRCUIT, RENDERED IN THE
CASE OF SPEVACK V. STRAUSS, SEPTEMBER 19, 1957, 248 F.2D 752, AND
JUNE 9, 1958, 257 F.2D 208, WHERE IT WAS ALLEGED THAT AN UNAUTHORIZED
PUBLICATION BY THE ATOMIC ENERGY COMMISSION OF TRADE SECRETS CONSTITUTED
A TAKING OF PROPERTY FOR WHICH COMPENSATION MUST BE PAID UNDER THE FIFTH
AMENDMENT TO THE FEDERAL CONSTITUTION. IN THESE CASES THE COURT FOUND
THE PLAINTIFF'S REMEDY WAS NOT BY WAY OF A SUIT TO RESTRAIN THE
COMMISSION FROM PUBLICIZING THE INFORMATION BUT HELD THAT RECOVERY OF
SUCH COMPENSATION COULD BE HAD BY A SUIT IN THE COURT OF CLAIMS UNDER
THE PROVISIONS OF 28 U.S.C. 1491, PROVIDING THAT "THE COURT OF CLAIMS
SHALL HAVE JURISDICTION TO RENDER JUDGMENT UPON ANY CLAIM AGAINST THE
UNITED STATES FOUNDED EITHER UPON THE CONSTITUTION, OR ANY ACT OF
CONGRESS, OR ANY REGULATION OF AN EXECUTIVE DEPARTMENT, OR UPON ANY
EXPRESS OR IMPLIED CONTRACT WITH THE UNITED STATES, OR FOR LIQUIDATED OR
UNLIQUIDATED DAMAGES IN CASES NOT SOUNDING IN TORT.'
IN THE EVENT YOUR APPLICATION FOR A PATENT IS GRANTED, YOUR ATTENTIO
IS INVITED TO THE PROVISIONS OF 28 U.S.C. 1498 WHEREBY YOU MAY BE
PRIVILEGED TO FILE A SUIT IN THE COURT OF CLAIMS TO RECOVER REASONABLE
COMPENSATION FOR PATENT INFRINGEMENT BY CONTRACTORS WHEN SUPPLYING
GOVERNMENT REQUIREMENTS.
FROM A CAREFUL CONSIDERATION OF THE AVAILABLE RECORD IN THE LIGHT OF
THE PRINCIPLES SET OUT ABOVE, HOWEVER, WE DO NOT BELIEVE THE FACTS AND
CIRCUMSTANCES PRESENTED ESTABLISH THAT TECHNICAL INFORMATION AND DATA
CONSTITUTING "TRADE SECRETS" OF YOUR FIRM HAVE, IN FACT, BEEN UTILIZED
BY NASA IN THE INSTANT PROCUREMENT. ON THE OTHER HAND, IF IT WERE FOUND
THAT YOUR TECHNICAL INFORMATION HAS BEEN SO UTILIZED IT SEEMS QUITE
CLEAR THAT YOU HAVE FAILED TO TAKE THOSE MEASURES REASONABLY CALCULATED
AND NECESSARY TO PROTECT SUCH TECHNICAL INFORMATION AS "TRADE SECRETS"
BY RESTRICTING ITS USE AND POSSIBLE DISCLOSURE UNDER THE PARTICULAR
CIRCUMSTANCES INVOLVED. THIS IS TO SAY, THE RECORD DOES NOT SHOW THAT
YOU HAVE STIPULATED OR OBTAINED AN AGREEMENT WITH THE AGENCY THAT THE
TECHNICAL INFORMATION SUBMITTED WITH YOUR PROPOSAL INCLUDED "TRADE
SECRETS" AND WAS TO BE USED ONLY FOR EVALUATION PURPOSES; NOR DOES THE
RECORD SHOW THAT ITS USE WAS RESTRICTED IN ANY OTHER MANNER OR THAT YOU
REQUESTED ITS RETURN IF YOUR PROPOSAL WAS NOT ACCEPTED. IN THE ABSENCE
OF SUCH SPECIFIC MEASURES ON YOUR PART SUBSTANTIAL EVIDENCE ESTABLISHING
AN INTENT OR UNDERSTANDING OF THE PARTIES TO PROTECT THE TECHNICAL
INFORMATION FROM DISCLOSURE IS REQUIRED TO SHOW THE EXISTENCE OF AN
IMPLIED CONTRACT TO THAT EFFECT. CF. THE AUTHORITIES CITED ABOVE.
REASONABLY CONSTRUED, THE REGULATION APPLICABLE IN THE INSTANT CASE---
PARAGRAPH 3.109 OF THE NASA
PROCUREMENT REGULATION--- WOULD SEEM TO MANIFEST A PURPOSE TO
DISAFFIRM ANY SUCH IMPLICATION OF INTENTION OR UNDERSTANDING ON THE PART
OF THE PROCURING AGENCY. THUS, IN OUR OPINION, EXISTING LAW DOES NOT
SUPPORT THE POSITION THAT THE OFFER OF TECHNICAL INFORMATION FOR
EVALUATION PURPOSES NECESSARILY IMPLIES OF ITSELF, THAT SUCH INFORMATION
IS REGARDED AS A "TRADE SECRET" BY THE OFFEROR SO AS TO IMPOSE AN
OBLIGATION ON THE OFFEREE TO SO REGARD AND PROTECT IT, AS APPARENTLY
URGED BY YOU, PARTICULARLY WHERE AS HERE THE OFFER IS MADE PURSUANT TO A
REQUEST FOR PROPOSALS COVERING GOVERNMENT REQUIREMENTS IN ACCORDANCE
WITH A SPECIFIC ADMINISTRATIVE PROCEDURE PRESCRIBED BY REGULATION.
IN CONCLUSION, WE DO NOT BELIEVE THE INFORMATION AND EVIDENCE
SUBMITTED IN THIS MATTER REASONABLY MAY BE REGARDED AS AFFORDING
ADEQUATE JUSTIFICATION FOR REQUIRING CANCELLATION OF THE REQUEST FOR
PROPOSALS IN QUESTION, RFP 670-96015-262, AND YOUR PROTEST IS THEREFORE
DENIED.
B-157629, NOV. 18, 1965
TO MALAKER CORPORATION:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 8, 1965, AND
SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE PROPOSED AWARD OF A
CONTRACT TO D-VELCO MANUFACTURING OF ARIZONA BY THE KELLY AIR FORCE
BASE, TEXAS, PURSUANT TO DEPARTMENT OF THE AIR FORCE INVITATION NO.
41-608-65-1008.
AS PART OF A TWO-STEP PROCUREMENT THE SAN ANTONIO AIR MATERIEL AREA
(SAAMA), KELLY AIR FORCE BASE, TEXAS, ISSUED A REQUEST FOR TECHNICAL
PROPOSALS FOR THE MANUFACTURE OF 13 ITEMS PERTAINING TO F-101/102/106
CLOSED CYCLE INFRARED CELL COOLER SYSTEMS. INCLUDED ARE 11 FIRST
ARTICLES, 1,421 PRODUCTION ARTICLES, TWO DEPOT AEROSPACE GROUND
EQUIPMENT (AGE), 174 SETS OF FIELD LEVEL AGE, INITIAL SPARE PARTS AND
DATA. THE PROCUREMENT WAS A 100-PERCENT SET-ASIDE FOR SMALL BUSINESS
CONCERNS. UPON A TECHNICAL EVALUATION IT WAS FOUND THAT THE
PROPOSALS OF THE MALAKER CORPORATION, D-VELCO MANUFACTURING OF ARIZONA
AND KECO INDUSTRIES, INC., WERE TECHNICALLY ACCEPTABLE. D-VELCO
PROPOSED TO PROVIDE A COOLING SYSTEM MANUFACTURED BY ITSELF UNDER A
LICENSING
AGREEMENT WITH THE GARRETT CORPORATION, A LARGE BUSINESS CONCERN. I
IS REPORTED THAT IN VIEW OF THE LICENSING ARRANGEMENT, THE CONTRACTING
OFFICER ON JUNE 14, 1965, IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH
1-703 (B) (2) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR)
REQUESTED THE LOS ANGELES SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL
OFFICE TO DETERMINE D-VELCO'S SMALL BUSINESS STATUS. ON JUNE 29, 1965,
THE SBA NOTIFIED THE CONTRACTING OFFICER THAT D-VELCO HAD BEEN
DETERMINED TO BE A SMALL BUSINESS CONCERN.
UNDER STEP TWO, INVITATION FOR BIDS NO. 41-608-65-1008 WAS ISSUED ON
JULY 6, 1965, TO THE THREE COMPANIES WHOSE TECHNICAL PROPOSALS WERE
DETERMINED TO BE ACCEPTABLE UNDER STEP ONE. THE FOLLOWING THREE BIDS
WERE RECEIVED AND OPENED ON AUGUST 13, 1965: (BID "A" INCLUDES THE
,CORRECTION OF DEFICIENCIES" CLAUSE).
CHART
D-VELCO BID A $4,874,865
B 4,739,614
MALAKER A 5,136,018
B 4,982,646
KECO A 9,456,018
B 9,087,543
IN A LETTER AND TELEGRAM DATED AUGUST 16, 1965, TO THE CONTRACTING
OFFICE, YOU PROTESTED AGAINST THE MAKING OF ANY AWARD TO D-VELCO. YOU
ALLEGED THAT D-VELCO WAS NOT A SMALL BUSINESS CONCERN, BUT WAS IN FACT
SUBMITTING A BID DICTATED BY A "BIG BUSINESS," GARRETT CORPORATION,
THROUGH A LICENSING AGREEMENT. BY LETTER DATED AUGUST 17, 1965, YOU
FURTHER PROTESTED AGAINST ANY CONTRACT AWARD BEING MADE TO D-VELCO AND
YOU CONTEND THAT D-VELCO WAS NONRESPONSIVE TO THE INVITATION FOR BIDS
BECAUSE THAT FIRM DID NOT QUALIFY AS A MANUFACTURER WITHIN THE MEANING
OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35. YOU ALSO
CONTENDED THAT D-VELCO WAS NOT A RESPONSIBLE BIDDER BECAUSE IT DID NOT
QUALIFY AS A MANUFACTURER OF CRYOGENIC REFRIGERATORS.
THE RECORD INDICATES THAT ON AUGUST 20, 1965, SAAMA REQUESTED THE LOS
ANGELES SBA REGIONAL OFFICE TO REVERIFY THAT D-VELCO QUALIFIED AS A
SMALL BUSINESS CONCERN AS OF AUGUST 13, 1965, THE BID OPENING DATE;
THAT THE SBA REGIONAL OFFICE REAFFIRMED ITS PRIOR DETERMINATION THAT
D-VELCO IS A SMALL BUSINESS CONCERN FOR THE PURPOSE OF THIS PROCUREMENT;
THAT THE SIZE DETERMINATION MADE BY THE SBA REGIONAL OFFICE OF D-VELCO
WAS APPEALED BY YOUR FIRM AND KECO INDUSTRIES INC., TO THE SBA SIZE
APPEALS BOARD. BY A FINDING AND DECISION OF OCTOBER 2, 1965, THE SIZE
APPEALS BOARD DETERMINED THAT D-VELCO QUALIFIES AS A SMALL BUSINESS
CONCERN FOR GOVERNMENT PROCUREMENT OF CLOSED CYCLE CRYOGENIC
REFRIGERATOR COOLING SYSTEMS FOR FIGHTER AIRCRAFT. YOUR FIRM AND KECO
INDUSTRIES,
INC., REQUESTED THE SBA SIZE APPEALS BOARD TO RECONSIDER ITS DECISIO
OF OCTOBER 2, 1965, AND ON OCTOBER 29, 1965, THAT BOARD AFFIRMED ITS
DECISION OF OCTOBER 2, 1965.
THE RECORD INDICATES THAT ON AUGUST 23, 1965, THE PHOENIX CONTRACT
MANAGEMENT DISTRICT WAS REQUESTED BY THE CONTRACTING OFFICER TO CONDUCT
A FACILITIES CAPABILITY SURVEY ON D-VELCO; THAT THE REPORT OF THE
SURVEY WAS AFFIRMATIVE IN ALL AREAS, SUCH AS TECHNICAL, PRODUCTION AND
FINANCIAL CAPABILITY, QUALITY ASSURANCE, PURCHASING AND SUBCONTRACTING
AND PERFORMANCE RECORD. IT IS REPORTED THAT IN LIGHT OF THE PROTESTS
FILED BY YOUR FIRM AND THE TESTIMONY OF VARIOUS PARTIES BEFORE THE SBA
SIZE APPEALS BOARD, THE CONTRACTING OFFICE DIRECTED THE PHOENIX CONTRACT
MANAGEMENT DISTRICT TO VERIFY ITS PREVIOUS FINDINGS AS TO THE
CAPABILITIES OF D-VELCO TO PERFORM THE PROPOSED
CONTRACT. IN A REPORT DATED OCTOBER 8, 1965, THE FACILITY CAPABILIT
SURVEY TEAM REAFFIRMED THE CONCLUSIONS STATED IN THE PREVIOUS REPORT AND
IT CONCLUDED THAT D-VELCO'S PLAN OF OPERATION AS IT RELATES TO BOTH
PREPRODUCTION AND PRODUCTION PHASES IS ESSENTIALLY SOUND AND OFFERS AN
EXCELLENT BASIS FOR SATISFACTORY CONTRACT PERFORMANCE.
IT IS REPORTED THAT ON SEPTEMBER 7, 1965, THE OFFICE OF THE SECRETARY
OF THE AIR FORCE REQUESTED THE DEPARTMENT OF LABOR TO MAKE A FINAL
DETERMINATION ON D-VELCO'S ELIGIBILITY AS A MANUFACTURER UNDER THE
WALSH-HEALEY PUBLIC CONTRACTS ACT OF PURPOSES OF AN AWARD OF THIS
PROCUREMENT. BY LETTER DATED SEPTEMBER 15, 1965, THE DEPARTMENT OF
LABOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, NOTIFIED THE AIR
FORCE THAT "D-VELCO MANUFACTURING COMPANY IS ELIGIBLE TO BE AWARDED THE
CONTRACT UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT.'
NO AWARD HAS BEEN MADE, BUT THE CONTRACTING OFFICE CONTEMPLATES
MAKING AN AWARD TO D-VELCO. THE CONTRACTING OFFICER HAS DETERMINED THAT
D-VELCO IS A RESPONSIBLE PROSPECTIVE CONTRACTOR WITHIN THE MEANING OF
ASPR 1-902, AND THAT ITS BID, WHICH IT IS REPORTED HAS BEEN VERIFIED BY
THE CORPORATION AS BEING CORRECT AS TO PRICE, IS RESPONSIVE TO THE
REQUIREMENTS OF THE INVITATION FOR BIDS. THE DEPARTMENT OF AIR FORCE
STATES THAT IN VIEW OF THE MANY RULINGS AND DECISIONS ALL ESTABLISHING
THE ABILITY OF D-VELCO TO PERFORM THE CONTEMPLATED CONTRACT, ITS
RECOMMENDATION IS THAT THE PROCUREMENT AGENCY BE AUTHORIZED TO PROCEED
WITH THE AWARD TO D-VELCO.
IN YOUR LETTER OF OCTOBER 5, 1965, YOU STATE THAT D-VELCO IS A SMALL
MACHINE SHOP AND THAT IT HAS HAD NO EXPERIENCE IN THE REFRIGERATION
BUSINESS. YOU ALLEGE THAT D-VELCO COULD NOT POSSIBLY MANUFACTURE THE
SOPHISTICATED AND COMPLICATED CRYOGENIC COOLER WITHOUT AN AFFILIATION
WITH THE GARRETT CORPORATION, A BIG BUSINESS CONCERN WHICH, YOU STATE,
INDUCED D-VELCO TO SUBMIT A BID ON THE COOLERS. YOU CONTEND THAT
D-VELCO WAS NONRESPONSIVE TO THE INVITATION FOR BIDS BECAUSE THE FIRM
DOES NOT QUALIFY AS A MANUFACTURER OF CRYOGENIC COOLERS OF THE
JOULE-THOMSON DESIGN. IN A LETTER DATED OCTOBER 11, 1965, YOUR ATTORNEY
CONTENDS THAT THE DEPARTMENT OF LABOR'S FINDING THAT D-VELCO IS A
MANUFACTURER OF CRYOGENIC COOLERS OF THE JOULE-THOMSON DESIGN WAS NOT
SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS GROSSLY ERRONEOUS. IN VIEW OF
YOUR CONTENTION, THE DEPARTMENT OF LABOR WAS REQUESTED BY OUR OFFICE TO
FURNISH ITS COMMENTS AND VIEWS ON YOUR ALLEGATIONS AS TO THE ELIGIBILITY
OF D-VELCO TO QUALIFY AS A MANUFACTURER UNDER THE WALSH-HEALEY PUBLIC
CONTRACTS ACT. ON OCTOBER 26, 1965, THE ADMINISTRATOR, WAGE AND HOUR
AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, ADVISED OUR OFFICE
AS FOLLOWS:
"THE DEPARTMENT OF THE AIR FORCE REFERRED THIS MATTER TO THE WHPC
DIVISIONS FOR DECISION AFTER RULING ON THE FIRM'S ELIGIBILITY. THE
MATERIALS SUBMITTED FOR CONSIDERATION, WHICH INCLUDE TWO LETTERS FROM
THE MALAKER CORPORATION, OFFERED NO BASIS FOR OVERRULING THE AGENCY'S
FINDING THAT D-VELCO MANUFACTURING COMPANY HAD MADE ALL ARRANGEMENTS TO
PERFORM THE CONTRACT UNDER CONSIDERATION. ON THIS BASIS, IT SATISFIED
THE REQUIREMENTS FOR ELIGIBILITY AS A MANUFACTURER SET
FORTH IN CIRCULAR LETTER 8-61, A COPY OF WHICH IS ENCLOSED.'
CIRCULAR LETTER NO. 8-61 DATED JULY 6, 1961, TO WHICH THE
ADMINISTRATOR REFERS, IS AS FOLLOWS:
"1. MANUFACTURER
"REGULATIONS PART 50-201, SECTION 50-201.101 (A) DEFINES A
MANUFACTURER AS "A PERSON WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR
ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES,
ARTICLES OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL
CHARACTER DESCRIBED BY THE SPECIFICATIONS.'
"A BIDDER WHO DESIRES TO QUALIFY FOR AN AWARD AS A MANUFACTURER MUST
SHOW BEFORE THE AWARD THAT HE IS (1) AN ESTABLISHED MANUFACTURER OF THE
PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE
GOVERNMENT OR (2) IF HE IS NEWLY ENTERING INTO SUCH MANUFACTURING
ACTIVITY THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR (A)
MANUFACTURING SPACE, (B) EQUIPMENT, AND (C) PERSONNEL TO PERFORM THE
MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT.
A NEW FIRM WHICH, PRIOR TO THE AWARD OF A CONTRACT, HAS MADE SUCH
DEFINITE COMMITMENTS IN ORDER TO ENTER A MANUFACTURING BUSINESS WHICH
WILL LATER QUALIFY IT SHOULD NOT BE BARRED FROM RECEIVING THE AWARD
BECAUSE IT HAS NOT YET DONE ANY MANUFACTURING. THIS INTERPRETATION IS
NOT INTENDED, HOWEVER, TO QUALIFY A FIRM WHOSE ARRANGEMENTS TO USE
SPACE, EQUIPMENT OR PERSONNEL ARE CONTINGENT UPON THE AWARD OF A
GOVERNMENT CONTRACT.'
THE SUPREME COURT AND OUR OFFICE HAVE TAKEN THE POSITION--- IN VIEW
OF THE AUTHORITY AND RESPONSIBILITY OF THE DEPARTMENT OF LABOR UNDER THE
WALSH-HEALEY PUBLIC CONTRACTS ACT--- THAT THE DETERMINATION OF A
BIDDER'S QUALIFICATIONS AS A MANUFACTURER WITHIN THE MEANING OF THE ACT
AND ITS IMPLEMENTING REGULATIONS IS PRIMARILY THE RESPONSIBILITY OF THE
CONTRACTING OFFICER SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH
IS THE FINAL REVIEW AUTHORITY. SEE ENDICOTT JOHNSON CORPORATION V.
PERKINS, 317 U.S. 501; B-148715, JUNE 25, 1962; B-147877, MAY 10,
1962; B-145015, MAY 8, 1961; 21 COMP. GEN. 9; DEPARTMENT OF LABOR
RULINGS AND INTERPRETATIONS NO. 3, APRIL 30, 1953. SINCE THE DEPARTMENT
OF LABOR DID NOT FIND, UPON REVIEW, THAT ON THE BASIS OF THE EVIDENCE
PRESENTED THE CONTRACTING OFFICER'S DETERMINATION WAS ERRONEOUS, WE,
THEREFORE, CANNOT QUESTION THE ADMINISTRATIVE DETERMINATION THAT D-VELCO
QUALIFIES AS A MANUFACTURER FOR THE PURPOSES OF THIS PROCUREMENT. WE
ARE, HOWEVER, OF THE OPINION THAT THE RECORD CONTAINS SUFFICIENT
EVIDENCE TO SUPPORT SUCH A DETERMINATION.
YOU ALLEGE THAT THE FACILITIES CAPABILITY REPORT OF THE DEPARTMENT OF
THE AIR FORCE IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND IS GROSSLY
ERRONEOUS. THE RECORD SHOWS THAT AFTER RECEIVING YOUR PROTEST THE
CONTRACTING OFFICE REQUESTED THE PHOENIX CONTRACT MANAGEMENT DISTRICT TO
VERIFY ITS PREVIOUS FINDINGS ON D-VELCO AS TO ITS RESPONSIBILITY AS A
PROSPECTIVE CONTRACTOR AND THAT AS A RESULT A SECOND SURVEY WAS
CONDUCTED ON OCTOBER 6, 7 AND 8, 1965. THE SECOND SURVEY REAFFIRMED THE
CONCLUSIONS STATED IN THE FIRST SURVEY REPORT. IN VIEW OF THE FACT THAT
THE FINDINGS OF THE FIRST SURVEY TEAM AS TO THE RESPONSIBILITY OF
D-VELCO AS A PROSPECTIVE CONTRACTOR WERE CONCURRED IN BY A SECOND SURVEY
TEAM AND SINCE THE DETERMINATION AS TO THE RESPONSIBILITY OF A
PROSPECTIVE CONTRACTOR IS THE PRIMARY RESPONSIBILITY OF THE CONTRACTING
OFFICE, WE FEEL THAT IT IS NOT WITHIN OUR PROVINCE TO REVIEW THE
FACILITY CAPABILITY REPORT IN QUESTION.
YOU CONTEND THAT THE DECISION OF THE SBA SIZE APPEALS BOARD TO THE
EFFECT THAT D-VELCO HAS BEEN DETERMINED TO BE A SMALL BUSINESS CONCERN
FOR PURPOSES OF THIS PROCUREMENT WAS GROSSLY ERRONEOUS IN LAW AND NOT
SUPPORTED BY SUBSTANTIAL EVIDENCE. YOU ALLEGE THAT IN DETERMINING THAT
D-VELCO WAS A SMALL BUSINESS CONCERN, THE SBA SIZE APPEALS BOARD FAILED
TO FOLLOW THE SMALL BUSINESS ADMINISTRATION REGULATIONS, PARTICULARLY
SECTION 121.3-2 (A) OF THE SMALL BUSINESS SIZE STANDARDS REGULATIONS,
RELATING TO AFFILIATES. YOU STATE THAT THE BOARD HAS USED AN ERRONEOUS
STANDARD IN INTERPRETING ITS OWN REGULATION AND IN DETERMINING WHETHER
OR NOT AN AFFILIATION EXISTED BETWEEN D-VELCO AND THE GARRETT
CORPORATION. IN HIS LETTER OF OCTOBER 11, 1965, YOUR ATTORNEY STATES:
"AT THE BOTTOM OF PAGE 3 OF ITS DECISION, THE BOARD MADE THE
FOLLOWING VERY MATERIAL AND RELEVANT FINDING:
"* * * THERE IS NO DISPUTE THAT THE FIRST ELEVEN TEST ITEMS WILL BE
COMPLETELY FABRICATED BY GARRETT.
"THAT FINDING ALONE UNDER THE SBA REGULATIONS PREVENTS D-VELCO FROM
BEING A SMALL BUSINESS. SECTION 121.3-8 (B) OF THE SMALL BUSINESS SIZE
STANDARDS REGULATIONS PROVIDES AS FOLLOWS:
* * * ANY CONCERN WHICH SUBMITS A BID OR OFFER IN ITS OWN NAME, OTHER
THAN A CONSTRUCTION OR SERVICE CONTRACT, BUT WHICH PROPOSES TO FURNISH A
PRODUCT NOT MANUFACTURED BY SAID BIDDER OR OFFEROR, IS DEEMED TO BE A
SMALL BUSINESS CONCERN WHEN:
"/1) IT IS A SMALL BUSINESS CONCERN WITHIN THE MEANING OF SUBSECTION
(A) OF THIS SECTION (ITS NUMBER OF EMPLOYEES DOES NOT EXCEED 500
PERSONS), AND
"/2) IN THE CASE OF GOVERNMENT PROCUREMENT RESERVED FOR OR INVOLVING
THE PREFERENTIAL TREATMENT OF SMALL BUSINESS, SUCH NONMANUFACTURER SHALL
FURNISH IN THE PERFORMANCE OF THE CONTRACT THE PRODUCTS OF A SMALL
BUSINESS MANUFACTURER OR PRODUCER WHICH PRODUCTS ARE MANUFACTURED OR
PRODUCED IN THE UNITED STATES.'
"AT THE HEARING BEFORE THE SMALL BUSINESS ADMINISTRATION BOARD,
D-VELCO'S REPRESENTATIVE TESTIFIED THAT D-VELCO HAD HAD NO EXPERIENCE IN
THE TYPE OF PRODUCTION CALLED FOR UNDER THE IFB AND THAT IT COULD ONLY
PERFORM THE CONTRACT WITH THE SUBSTANTIAL ASSISTANCE OF GARRETT, AN
ADMITTED BIG BUSINESS. HE ALSO TESTIFIED THAT IT WAS IMPOSSIBLE FOR
D-VELCO TO DELIVER THE 11 FIRST ARTICLES UNLESS THEY WERE MANUFACTURED
BY GARRETT (TR. 157, 158, 161, 249, 251).
"D-VELCO DID NOT DISCLOSE IN ITS BID OR AT ANY OTHER TIMES PRIOR TO
THE HEARING BEFORE THE SMALL BUSINESS ADMINISTRATION BOARD THAT GARRETT
WAS TO MANUFACTURE THE 11 FIRST ARTICLES (TR. 158). SECTION 121.3-8
(B) APPLIES WHEREVER A CONCERN IS NOT TO MANUFACTURE THE PROPOSED ITEMS.
THE EVIDENCE BEFORE THE SMALL BUSINESS ADMINISTRATION BOARD NOT ONLY
CLEARLY SHOWS THAT D-VELCO WAS NOT TO MANUFACTURE THE 11 FIRST ARTICLES,
BUT THAT GARRETT WAS ALSO TO MANUFACTURE SUBSTANTIAL PARTS OF THE
REMAINING UNITS (D-VELCO'S EXHIBIT 3 BEFORE THE SMALL BUSINESS
ADMINISTRATION BOARD, A COPY OF WHICH IS ATTACHED).
"IT IS SUBMITTED THAT SINCE D-VELCO IS NOT TO MANUFACTURE THE 11
FIRST ARTICLES AND SINCE THEY ARE NOT TO BE MANUFACTURED BY A SMALL
BUSINESS MANUFACTURER, D-VELCO IS NOT A SMALL BUSINESS FOR THE PURPOSES
OF THE PROCUREMENT INVOLVED, WITHIN THE MEANING OF THE TERM AS DEFINED
BY SMALL BUSINESS SIZE STANDARDS SECTION 121.3-8 (B) NOW IN EFFECT.
"THE ABOVE QUOTED FINDING ON PAGE 3 OF THE SMALL BUSINESS
ADMINISTRATION BOARD'S DECISION THAT THERE IS NO DISPUTE BUT WHAT THE 11
FIRST ARTICLES ARE TO BE COMPLETELY FABRICATED BY GARRETT, MAKES THE
RELATIONSHIP BETWEEN GARRETT AND D-VELCO SUCH THAT IT CANNOT BE CONDONED
OR APPROVED IN LAW. THE IFB FOR THE PROCUREMENT INVOLVED SPECIFICALLY
PROVIDES THAT THE 11 FIRST ARTICLES MUST BE MANUFACTURED BY THE
CONTRACTOR. THAT IS PLAINLY SHOWN BY THE FOLLOWING PROVISION OF THE
IFB:
"PART III - FIRST ARTICLE APPROVAL AND TEST REPORT:
"/A) THE CONTRACTOR WILL MANUFACTURE SIX (6) EACH ITEM NR. 1 AND FIVE
(5) EACH ITEM NR. 2 (FSN 4120 NC402850P). THESE ITEMS WILL BE
DESIGNATED AS FIRST ARTICLES.
"HENCE, IF D-VELCO WERE TO BE AWARDED SUCH A CONTRACT, THE PRODUCTION
OF THE 11 FIRST ARTICLES BY GARRETT WOULD BE A CLEAR BREACH OF CONTRACT.
* * *"
IN VIEW OF YOUR CONTENTIONS, OUR OFFICE REQUESTED THE SBA TO FURNISH
US ITS COMMENTS AND VIEWS REGARDING YOUR PROTEST AGAINST THE FINDINGS
AND DECISIONS OF THE SBA SIZE APPEALS BOARD, APPROVED OCTOBER 2, 1965,
HOLDING THAT D-VELCO WAS A SMALL BUSINESS CONCERN FOR THE PURPOSE OF
BIDDING ON A PROCUREMENT OF CLOSED CYCLE CRYOGENIC REFRIGERATION COOLING
SYSTEMS. IN ITS LETTER OF NOVEMBER 4, 1965, THE ACTING GENERAL COUNSEL
OF SBA ADVISED OUR OFFICE AS FOLLOWS:
"MALAKER CORPORATION CONTENDS THAT THE DECISION OF THE SIZE APPEALS
BOARD WAS GROSSLY ERRONEOUS IN LAW AND NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE. SIMILAR CONTENTIONS WERE MADE IN A REQUEST FOR
RECONSIDERATION OF THE BOARD'S DECISION IN ITS LETTERS DATED OCTOBER 7
AND OCTOBER 11, 1965, COPIES OF WHICH ARE ENCLOSED. MALAKER CORPORATION
ALSO ALLEGES THAT THE MAJORITY OPINION DID NOT CONSIDER ALL APPROPRIATE
FACTORS AS REQUIRED BY SECTION 121.3-2 (A) OF THE SMALL BUSINESS SIZE
STANDARDS REGULATION IN DETERMINING "AFFILIATION" IN THIS CASE. IT
ALLEGES FURTHER THAT SINCE THE FIRST ELEVEN ITEMS WERE TO BE
MANUFACTURED BY THE GARRETT CORPORATION (A LARGE BUSINESS CONCERN),
D-VELCO DID NOT PROPOSE TO FURNISH PRODUCTS OF A SMALL BUSINESS
MANUFACTURER AS REQUIRED BY SECTION 121.3-8 (B) OF THE SMALL BUSINESS
SIZE STANDARDS REGULATION AND WAS THEREFORE NOT A SMALL BUSINESS
CONCERN. THESE CONTENTIONS WERE ALL CONSIDERED AND REJECTED BY THE SIZE
APPEALS BOARD IN A DECISION APPROVED OCTOBER 29, 1965, A COPY OF WHICH
IS ENCLOSED.'
THE RECORD INDICATES THAT YOUR FIRM REQUESTED THE SBA SIZE APPEALS
BOARD TO RECONSIDER ITS DECISION OF OCTOBER 2, 1965. ON OCTOBER 29,
1965, THE BOARD DENIED YOUR MOTION FOR RECONSIDERATION AND IN ITS
DECISION OF THAT DATE IT STATED AS FOLLOWS:
"THE MAJORITY OF THE BOARD IS NOT PERSUADED IT ERRED AS TO THE FACTS
OR THE LAW AND AFFIRMS ITS ORIGINAL DECISION. THE MAJORITY DECISION
TOOK INTO CONSIDERATION SECTION 121.3-2 (A) OF THE SMALL BUSINESS SIZE
STANDARDS REGULATION IN MAKING ITS DECISION AND CONSIDERED ALL
APPROPRIATE FACTORS HAVING A BEARING UPON THE QUESTION OF AFFILIATION.
"ALTHOUGH NOT PRESENTED BY THE APPELLANTS AND, THEREFORE, NOT
EXPRESSLY STATED IN EITHER THE MAJORITY OR THE MINORITY OPINION, THE
WRITERS OF BOTH HAD CONSIDERED THE EFFECT OF SECTION 121.3-8 (B) OF THE
SMALL BUSINESS SIZE STANDARDS REGULATION UPON THE ADMITTED FACT THAT
D-VELCO PROPOSED TO HAVE THE "FIRST ARTICLES" OR "PREPRODUCTION MODELS"
MANUFACTURED BY GARRETT CORPORATION. ALL MEMBERS OF THE BOARD,
INCLUDING THE DISSENTING MEMBER, CONSIDERED THAT THERE WAS SUBSTANTIAL
COMPLIANCE WITH SECTION 121.3-8 (B) OF THE REGULATION, SINCE, OF A TOTAL
OF 1,433 COMPLETED UNITS TO BE MANUFACTURED UNDER THE PROPOSED CONTRACT,
ONLY ELEVEN (OR 0.7 PERCENT) WERE TO BE MADE BY GARRETT CORPORATION AND
THESE WERE FOR TESTING AND THIS ARRANGEMENT WAS PROPOSED BY D-VELCO
SOLELY IN ORDER TO MEET THE SHORT DELIVERY SCHEDULE REQUIRED FOR THE
FIRST ELEVEN ITEMS.'
IN A LETTER DATED NOVEMBER 2, 1965, YOUR ATTORNEY QUESTIONS THE
CORRECTNESS OF THE BOARD'S DECISION OF OCTOBER 29, 1965. HE STATES THAT
THE BOARD HAS OVERLOOKED THE SIGNIFICANCE OF THE FIRST ARTICLE CLAUSE OF
THE INVITATION FOR BIDS WHICH PROVIDES THAT THE CONTRACTOR MUST
MANUFACTURE THE 11 FIRST ARTICLES. YOU CONTEND THAT THE GARRETT
CORPORATION, NOT D-VELCO, IS GOING TO MANUFACTURE THE 11 FIRST ARTICLES.
CONTRARY TO YOUR CONTENTION THE DEPARTMENT OF THE AIR FORCE STATES IN
ITS LETTER OF OCTOBER 20, 1965, AS FOLLOWS:
"* * * D-VELCO'S ORIGINAL PRODUCTION PLANS AS DISCLOSED AT THE SBA
HEARINGS HAVE SINCE UNDERGONE SUBSTANTIAL REVISION. BY LETTER DATED
OCTOBER 8, 1965, D-VELCO ADVISED SAAMA "... WE, AT D-VELCO, BELIEVE THAT
DUE TO THE DELAY OF THE AWARD AND IN FURTHER CHECKING THAT WE CAN NOW
ASSEMBLE AND ACCEPTANCE TEST THE BALANCE NINE (9) OF THE PREPRODUCTION
UNITS. DURING THE ASSEMBLY AND TEST OF THE FIRST TWO PREPRODUCTION
ITEMS, WE WILL HAVE OUR PEOPLE AT THE GARRETT CORPORATION,
IN LOS ANGELES, WITNESSING THE ASSEMBLY AND TESTING OF THE FIRST TWO
UNITS. WE HAVE ALSO REQUESTED OF THE GARRETT CORPORATION THAT DURING
THE PHASES OF ASSEMBLY AND TESTING OF THE BALANCE
NINE (9) UNITS THAT WE HAVE AT D-VELCO THEIR LIAISON ENGINEER AND ANY
ONE OF THEIR PEOPLE WHO CAN HELP PREPARE OUR PEOPLE TO DO THE BEST
POSSIBLE JOB FOR THE AIR FORCE. THE ELEVEN UNITS, IN THE WAY WE ARE
PROPOSING, WE FEEL WILL BE TYPICAL IN MANUFACTURING, ASSEMBLY AND
TESTING OF THE PREPRODUCTION UNITS.' IN ADDITION, D-VELCO INFORMED SBA,
IN AN AFFIDAVIT DATED SEPTEMBER 20, 1965, AND SUBMITTED AT THE CLOSE OF
THE SIZE APPEALS BOARD HEARINGS, THAT IT WOULD MANUFACTURE SOME PARTS
FOR ALL UNITS, INCLUDING THE FIRST ELEVEN PREPRODUCTION UNITS. THE
ABOVE PLAN FOR THE PRODUCTION OF PROTOTYPES IS ACCEPTABLE TO THE AIR
FORCE AND CONSTITUTES SUBSTANTIAL COMPLIANCE WITH THE PROVISIONS OF THE
FIRST ARTICLE CLAUSE OF THE IFB.'
UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WHICH
FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS
CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW
FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR
LENDING POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S
DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED
"SMALL-BUSINESS CONCERNS," AS AUTHORIZED AND DIRECTED UNDER THIS
PARAGRAPH.'
REGULATIONS OF SBA, DEFINING A SMALL BUSINESS CONCERN, HAVE THE FORCE
AND EFFECT OF LAW. OTIS STEEL PRODUCTS CORPORATION V. UNITED STATES,
316 F.2D 937. IN THE CASE OF SPRINGFIELD WHITE CASTLE COMPANY V. FOLEY,
230 F.SUPP. 77, 78 (1964), THE COURT, IN CONSIDERING AN ACTION TO
DETERMINE WHETHER A DECISION BY SBA THAT THE PLAINTIFF WAS NOT A SMALL
BUSINESS CONCERN WAS ERRONEOUS AND NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE, HELD IN PERTINENT PART:
"BEFORE EMBARKING ON A DISCUSSION OF THE FACTS IT SHOULD FIRST BE
POINTED OUT THAT IF THE DETERMINATION OF THE ADMINISTRATOR IS SUPPORTED
BY SUBSTANTIAL EVIDENCE, THEN THAT DECISION IS FINAL UNLESS ERRONEOUS AS
A MATTER OF LAW. SEC. 1009, TITLE 5, U.S.C. IN THE PRESENT CASE THE
PLAINTIFF DOES NOT QUARREL WITH THE VALIDITY OF THE REGULATIONS UNDER
WHICH IT WAS DETERMINED THAT PLAINTIFF IS NOT A SMALL BUSINESS, BUT
PLAINTIFF ASSERTS THAT THE FINDING OF THE ADMINISTRATOR IS NOT SUPPORTED
BY SUBSTANTIAL EVIDENCE. WHILE THIS COURT MIGHT, IF MAKING THE ORIGINAL
DETERMINATION, REACH A RESULT DIFFERENT THAN THAT REACHED BY THE
ADMINISTRATOR, IF THE FINDING OF THE ADMINISTRATOR IS SUPPORTED BY
SUBSTANTIAL EVIDENCE THEN THE FINDING OF THE ADMINISTRATOR MUST STAND AS
FINAL. * * *"
INASMUCH AS IT APPEARS THAT THE SBA DETERMINATION THAT D-VELCO WAS A
SMALL BUSINESS CONCERN WAS SUPPORTED BY SUBSTANTIAL EVIDENCE WE THINK
ITS FINDING MUST BE CONSIDERED FINAL.
IN THE LIGHT OF THE HOLDINGS OF THE DEPARTMENT OF LABOR AND THE SBA,
AS INDICATED IN THE PRECEDING PARAGRAPHS, WE FEEL THAT THE PROPOSED
AWARD OF A CONTRACT TO D-VELCO MANUFACTURING OF ARIZONA PURSUANT TO THIS
INVITATION IS JUSTIFIED AND, ACCORDINGLY, YOUR PROTEST MUST BE DENIED.
B-120159, NOV. 17, 1965
TO KING AND KING:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 24, 1965, REQUESTING
RECONSIDERATION OF THE SETTLEMENT ISSUED TO MR. FRANK M. MONDEAU BY THE
CLAIMS DIVISION OF OUR OFFICE UNDER DATE OF SEPTEMBER 1, 1965, WITH
RESPECT TO THE METHOD USED IN COMPUTING THE AMOUNT OF THE ADJUSTMENT
ALLOWED FOR THE PERIOD OCTOBER 1, 1963, TO JULY 31, 1965.
THE ADJUSTMENT ALLOWED REPRESENTS AN INCREASE IN RETIRED PAY IN
ACCORDANCE WITH THE DECISION IN THE CASE OF CALLAHAN V. UNITED STATES,
CT.CL. NO. 349-62, DATED FEBRUARY 14, 1964, AND SUCH ADJUSTMENT IS
APPLICABLE ONLY WHEN RETIRED PAY IS COMPUTED ON THE RATES OF "SAVED PAY"
IN ACCORDANCE WITH CERTAIN LAWS IN EFFECT PRIOR TO ENACTMENT OF THE
CAREER COMPENSATION ACT, APPROVED OCTOBER 12, 1949, CH. 681, 63 STAT.
802, WITH PERCENTAGE INCREASES AUTHORIZED BY LAW THEREAFTER.
THE CORRECT RATE OF RETIRED PAY TO WHICH MR. MONDEAU WAS ENTITLED IN
ACCORDANCE WITH THE CALLAHAN DECISION WAS $208.59 PER MONTH IMMEDIATELY
PRIOR TO ENACTMENT OF THE UNIFORMED SERVICES PAY ACT OF 1963, APPROVED
OCTOBER 2, 1963, PUB.L. 88-132, 77 STAT. 210, AND THE SETTLEMENT OF
SEPTEMBER 1, 1965, ALLOWED ADJUSTMENT TO THAT RATE FOR THE PERIOD
OCTOBER 10, 1959, TO SEPTEMBER 30, 1963. BEGINNING OCTOBER 1, 1963,
HOWEVER, THE RATE OF $208.59 SHOULD HAVE BEEN INCREASED BY 5
PERCENT UNDER SECTION 5 (E) OF THE 1963 PAY ACT TO MAKE THE NEW
MONTHLY RATE OF ENTITLEMENT $219.02, WHEREAS THE SETTLEMENT ALLOWED ONLY
AN ADJUSTMENT TO $218.93 PER MONTH FOR THE PERIOD OCTOBER 1, 1963, TO
JULY 31, 1965. THEREFORE A SUPPLEMENTAL SETTLEMENT ALLOWING MR.
MONDEAU THE
B-157108, NOV. 17, 1965
TO ULTRASONIC INDUSTRIES, INC. :
REFERENCE IS MADE TO YOUR LETTER OF JULY 23, 1965, WITH ENCLOSURES,
PROTESTING AWARD TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO.
600-405-65, ISSUED BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C.
BIDS WERE REQUESTED FOR FURNISHING ULTRASONIC CLEANING SYSTEMS, WITH
ULTRASONIC GENERATORS, CLEANING TANK, RINSE TANK AND DRYERS. AT THE
OPENING ON MARCH 29, 1965, 14 BIDS HAD BEEN RECEIVED RANGING IN UNIT
PRICE FROM YOUR LOW BID OF $2,349.50 TO $7,917. THE BIDS WERE FORWARDED
TO THE U.S. NAVY MARINE ENGINEERING LABORATORY FOR EVALUATION AS TO
CONFORMANCE WITH THE IFB SPECIFICATIONS, AND THE LABORATORY, BY LETTER
OF APRIL 14, 1965, ADVISED THE NAVY PURCHASING OFFICE THAT YOUR BID DID
NOT CONFORM TO THE REQUIREMENTS OF THE SPECIFICATIONS IN THAT YOU WERE
BIDDING ON A CABINET WHICH MEASURED 39 INCHES FROM FRONT TO REAR, AS
SHOWN ON YOUR DRAWING B-S-44C, INSTEAD OF 29 INCHES, AS REQUIRED, AND
THAT THIS DIMENSION COULD NOT BE EXCEEDED. SINCE THIS WAS CONSIDERED TO
BE A MATERIAL DEVIATION, YOUR BID WAS DETERMINED TO BE NONRESPONSIVE AND
AWARD WAS MADE ON JUNE 18, 1965, TO ANOTHER BIDDER.
YOU HAVE PROTESTED THIS ACTION ON THE GROUND THAT YOUR BID OFFERED TO
FURNISH EQUIPMENT IN ACCORDANCE WITH THE SPECIFICATIONS AND THAT IF THE
FIGURE "39" INCHES DID APPEAR ON A DRAWING SUBMITTED WITH YOUR BID, IT
WAS A TYPOGRAPHICAL ERROR OR AN ERROR ON THE PART OF THE DRAFTSMAN WHO
PREPARED THE DRAWING, OR THE NUMBER WAS BEING MISREAD, BUT THAT IN ANY
EVENT, A DEPTH OF 29 INCHES WAS PRECISELY WHAT YOU PROPOSED TO FURNISH.
ADDITIONALLY, YOU ALLEGE THAT THERE WAS NO REQUIREMENT IN THE IFB
CALLING FOR SUBMISSION OF A DRAWING SHOWING ANY DIMENSIONS WHATSOEVER
AND THAT THE DRAWING IN QUESTION WAS NOT A PART OF YOUR BID, BUT WAS
SUBMITTED SOLELY TO GIVE EVIDENCE OF YOUR COMPANY'S CAPABILITIES IN
CABINETIZED ULTRASONIC CLEANERS.
ALL BIDS MUST BE EVALUATED ON THE SAME BASIS, AND A BID WHICH OFFERS
TO FURNISH EQUIPMENT DIFFERING MATERIALLY FROM THE REQUIREMENTS OF THE
SPECIFICATIONS MAY NOT BE CONSIDERED AS RESPONSIVE. TO PERMIT
CORRECTION OF A NONRESPONSIVE BID AFTER OPENING WOULD BE TANTAMOUNT TO
PERMITTING A BIDDER TO SUBMIT A NEW BID. 38 COMP. GEN. 819, 821.
THE SPECIFICATIONS OF THE IFB PROVIDE, IN PERTINENT PART, AS FOLLOWS:
"3.1.1 ENCLOSURE CABINETS - THE ULTRASONIC CLEANING SYSTEM SHALL BE
CONTAINED IN NOT MORE THAN THREE (3) INDIVIDUAL CABINETS (CLEANER,
RINSER, DRYER); THE OUTSIDE DIMENSIONS OF WHICH SHALL NOT EXCEED THOSE
SHOWN IN PARAGRAPH 3.4 (A) OF THIS SPECIFICATION.
"3.4 CAPACITIES AND DIMENSIONS - CAPACITIES, DIMENSIONS AND ALL
APPLICABLE DETAILED REQUIREMENTS SHALL BE AS FOLLOWS:
CHART
"A. CABINET (ENCLOSURE) - 34 INCHES ACROSS FRONT
(CLEANER, RINSER, DRYER) BY 29 INCHES, FRONT TO
REAR BY 44 INCHES TOP
TO BOTTOM (INCLUDING
CONTROL PANEL)"
IT IS REPORTED THAT THE ABOVE PROHIBITION AGAINST EXCEEDING THE
OUTSIDE DIMENSIONS OF THE ENCLOSURE CABINETS IS DUE TO THE CRITICALNESS
OF SHIPBOARD SPACE IN THE TELETYPEWRITER SHOP AND GOES TO THE SUBSTANCE
OF THE BID. IN THESE CIRCUMSTANCES, AND SINCE THE INVITATION SHOWED
THAT THE ITEMS WERE TO BE DELIVERED TO NAMED NAVAL VESSELS, THE
SPECIFIED DIMENSIONS CANNOT BE REGARDED AS IMMATERIAL.
YOUR LETTER OF MARCH 25, 1965, FORWARDING YOUR BID FOR CONSIDERATION,
STATES AS FOLLOWS:
"DESCRIPTIVE LITERATURE IS ENCLOSED FOR PREAWARD EVALUATION.
"INCLUDED ARE: BLUEPRINT SHOWING ALL CONSOLES, WASHER, RINSER,
DRYER. * * *"
THE ABOVE-MENTIONED BLUEPRINT CAN BE NONE OTHER THAN DRAWING B-S-44C
AND, AS STATED IN YOUR LETTER OF TRANSMITTAL, WAS FORWARDED AS PART OF
YOUR DESCRIPTIVE LITERATURE FOR PREAWARD EVALUATION OF YOUR BID. THE
INVOLVED CABINET DIMENSION FROM FRONT TO REAR IS SHOWN CLEARLY ON THE
TOP VIEW INCLUDED IN THIS DRAWING AS "39" INCHES AND COULD NOT POSSIBLY
BE MISREAD. IT IS FURTHER NOTED THAT THE DRAWING IN QUESTION WAS
IDENTIFIED AS "A REV., " AND THE LEGEND THEREON INDICATED THAT THE
REVISION WAS "DIMEN. REVISED.'
REGARDLESS OF THE REQUIREMENTS OF THE IFB FOR FURNISHING DESCRIPTIVE
LITERATURE, THE FACT REMAINS THAT YOU SUBMITTED AS A PART OF YOUR BID
PACKAGE A COMPANY DOCUMENT WHICH INDICATED THAT YOU WERE OFFERING AN
ITEM THAT DIFFERED IN A MATERIAL RESPECT FROM THAT REQUIRED BY THE
INVITATION. IN OUR DECISION OF APRIL 15, 1957, 36 COMP. GEN. 705, WE
HELD, QUOTING FROM THE SYLLABUS, THAT:
"A BIDDER WHO VOLUNTARILY AUGMENTS HIS BID WITH DRAWINGS WHICH
CONTAIN MATERIAL DEVIATIONS FROM THE SPECIFICATIONS MAY NOT BE GIVEN AN
OPPORTUNITY AFTER THE BIDS ARE OPENED TO CLARIFY THE REASONABLE DOUBT
CONCERNING HIS INTENTION TO FURNISH EQUIPMENT MEETING THE REQUIREMENTS
NOR MAY THE DEVIATIONS WHICH GO INTO THE SUBSTANCE OF THE BID BE WAIVED
AS MERE INFORMALITIES.'
SEE, ALSO, 40 COMP. GEN. 432, 435. THERE IS NOTHING TO INDICATE THAT
THE FIGURE "39" HAD BEEN INSERTED IN ERROR, AND SINCE THE DEVIATION WENT
TO THE SUBSTANCE OF THE BID, IT COULD NOT BE WAIVED AS AN INFORMALITY.
EVEN IF ERROR WERE DEFINITELY AND SPECIFICALLY ALLEGED, WE HAVE HELD
THAT NONRESPONSIVENESS OF A BID MAY NOT BE CURED ON THAT GROUND. 38
COMP. GEN. 819, 39 ID. 774.
FOR THE REASONS STATED WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE
NAVY'S ACTION IN REJECTING YOUR BID AS NONRESPONSIVE AND YOUR PROTEST
MUST THEREFORE BE DENIED.
B-157747, NOV. 17, 1965
TO THE HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS
ADMINISTRATION:
REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 23, 1965, FILE
REFERENCE 5117/134, FROM THE CONTRACTING OFFICER AT THE VETERANS
ADMINISTRATION HOSPITAL, CANANDAIGUA, NEW YORK, REQUESTING A DECISION AS
TO WHETHER THE RELIEF SOUGHT BY THE FEARLESS DISHWASHER CO., INC.,
ROCHESTER, NEW YORK, UNDER PURCHASE ORDER NO. 2371 MAY BE GRANTED.
BY INVITATION NO. 65-21 BIDS WERE REQUESTED FOR FURNISHING TWO
DISHWASHING MACHINES. IN RESPONSE THE FEARLESS DISHWASHER CO., INC.,
SUBMITTED THE FOLLOWING BID:
"1. DISHWASHING MACHINE: COMMERCIAL, FOR STEAM HEATING; TYPE II,
SINGLE TANK, MANUALLY FED, SINGLE RACK, SIZE 20 INCH BY 20 INCH
(NOMINAL) RACKS, MODEL 50 SMT-20-TIME CONTROLLED PUMPED WASH AND FINAL
RINSE; MACHINE SHALL BE DESIGNED FOR STRAIGHT THROUGH OPERATION; MOTOR
SHALL BE POLYPHASE, SQUIRREL-CAGE, INDUCTION TYPE WITHOUT COMMUTATION
CONFORMING TO CC-M-641; 220 VOLT, 3 PHASE, 60 CYCLE; (TYPE 1 CUTLERY
RACKS NOT DESIRED); DOORLIFT OPERATION SHALL BE THE WRAP-AROUND STYLE
IN LIEU OF CABLE TYPE; SHALL BE IN ACCORDANCE WITH FEDERAL
SPECIFICATIONS OO-D-431B DATED MAY 22, 1964. 2 EA 1395.00 2790.00"
THE BID OF THE CORPORATION WAS ACCEPTED ON FEBRUARY 24, 1965.
IT IS REPORTED THAT ON MAY 6, 1965, THE CONTRACTING OFFICER CONTACTED
THE CORPORATION BY TELEPHONE AND ADVISED THE FIRM THAT THE DISHWASHING
RACKS REQUIRED BY THE CONTRACT SPECIFICATIONS WERE NOT DELIVERED WITH
THE MACHINES AND THAT THE MACHINES AS DELIVERED COULD NOT BE ACCEPTED
UNTIL THE RACKS WERE FURNISHED. A REPRESENTATIVE OF THE CORPORATION
REPLIED THAT INTERIM AMENDMENT NO. 1, DATED SEPTEMBER 22, 1964, TO
FEDERAL SPECIFICATION OO-D-431B, ELIMINATED THE REQUIREMENT THAT RACKS
BE FURNISHED WITH THE MACHINES.
IN A LETTER DATED MAY 6, 1965, THE CORPORATION STATES:
"CONFIRMING OUR PHONE CONVERSATION OF TODAY WITH MR. CALACINO
REGARDING NON-RECEIPT OF RACKS WITH THE DISHWASHING MACHINES SHIPPED ON
YOUR ORDER 2371. THIS LETTER WILL BE THE EXPLANATION OF THE
NON-RECEIPT.
"THESE MACHINES WERE IN ACCORDANCE WITH FEDERAL SPECIFICATIONS NO.
00-D431B. THE DATE OF THESE SPECIFICATIONS IS MAY 22, 1964. THERE IS
AN INTERIM AMENDMENT NO. 1 DATED SEPT. 22, 1964, AND IN THIS AMENDMENT
THERE IS A CHANGE TO PARAGRAPH 3.12.1 WHICH READS AS FOLLOWS:
PLACE A PERIOD AFTER "SPRAY ASSEMBLIES" AND DELETE THE BALANCE OF THE
PARAGRAPH, INCLUDING TABLE 1. ADD "IF RACKS ARE REQUIRED, THEY WILL BE
PROCURED IN ACCORDANCE WITH SPECIFICATION MIL-R-24-39.'
"THIS AMENDMENT IS THE REASON WHY WE DID NOT SHIP ANY RACKS WITH THE
DISHWASHING MACHINES. WE DO STOCK RACKS FOR DISHWASHING MACHINES AND IF
WE CAN BE OF SERVICE TO YOU, PLEASE LET US KNOW.'
IT IS REPORTED THAT AFTER PROCURING A COPY OF THE INTERIM AMENDMENT
TO THE SPECIFICATION THE CONTRACTING OFFICE ADVISED THE COMPANY BY
TELEPHONE THAT AS THE CONTRACTING OFFICE HAD NOT CITED THE AMENDMENT IN
THE INVITATION, IT WAS NOT APPLICABLE TO THE CONTRACT AND THAT THE
MACHINES WOULD NOT BE ACCEPTED UNLESS THE RACKS WERE FURNISHED BY THE
CORPORATION. IN REPLY THE CORPORATION STATED THAT AS IT WAS ANXIOUS TO
RECEIVE PAYMENT FOR THE MACHINES FURNISHED, IT WOULD FURNISH THE RACKS
AND SUBMIT A CLAIM FOR PAYMENT FOR THEM. THE RECORD INDICATES THAT THE
RACKS WERE DELIVERED ON JUNE 8, 1965, AND THAT THE CORPORATION SUBMITTED
A SEPARATE INVOICE IN THE AMOUNT OF $128.40 FOR THE 14 RACKS WHICH IT
FURNISHED.
IN A LETTER DATED JUNE 15, 1965, THE CORPORATION STATED THAT IT HAD
MADE A PRACTICE OF USING THE LATEST AMENDMENTS TO A SPECIFICATION SINCE
IT FELT THAT WAS ITS RESPONSIBILITY. IT CONTENDED THAT THE INVITATION
SHOULD HAVE SPECIFIED THE NUMBER OF RACKS TO BE SUPPLIED WITH EACH
DISHWASHING MACHINE.
THE RECORD INDICATES THAT THE CORPORATION SUBMITTED WITH ITS BID
LITERATURE WHICH APPEARS TO INDICATE THAT THE CORPORATION DID NOT
CONTEMPLATE FURNISHING RACKS AS STANDARD EQUIPMENT. THE CONTRACTING
OFFICER STATES THAT THE LITERATURE SUBMITTED BY THE CORPORATION WAS
UTILIZED TO SUBSTANTIATE SPECIAL CONDITIONS NOS. 6 AND 7, REQUIRING
BIDDERS TO FURNISH WITH THEIR BIDS SATISFACTORY EVIDENCE THAT THE
EQUIPMENT OFFERED COMPLIED WITH UNDERWRITERS LABORATORIES STANDARDS
AND NATIONAL SANITATION FOUNDATION STANDARDS, AND THAT THE
UNSOLICITED LITERATURE WAS OTHERWISE DISREGARDED BECAUSE IT WAS NOT
CLEAR FROM THE BID THAT IT WAS THE CORPORATION'S INTENTION TO QUALIFY
ITS PROPOSAL. THE LITERATURE SUBMITTED BY THE CORPORATION WITH ITS BID
CONSISTS OF THREE SHEETS. IT IS NOTED THAT ON ONE OF THESE SHEETS THERE
APPEAR THE SEALS OF UNDERWRITERS LABORATORIES, INC., AND NATIONAL
SANITATION FOUNDATION AND, ALSO, A LIST OF VARIOUS ITEMS OF STANDARD
EQUIPMENT FOR AN AUTOMATIC DOOR-TYPE STAINLESS STEEL DISHWASHER USING
20-INCH RACKS. AMONG THE VARIOUS ITEMS OF STANDARD EQUIPMENT APPEARING
ON SUCH SHEET THERE APPEARS THE FOLLOWING:
"PLASTISOL LINED RACKS: 2 PLATE, 1 GLASS, CUP, AND BOWL. ALSO ONE
SILVER BASKET.' THIS ITEM WAS LINED OUT IN PEN AND INK AND SINCE BOTH
THE UNDERWRITERS' SEALS AND THE ITEMS OF STANDARD EQUIPMENT APPEARED ON
THE SAME PAGE CLOSE TO EACH OTHER, WE ARE OF THE OPINION THAT THE
CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT THE CORPORATION HAD
QUALIFIED ITS BID AND IT SHOULD NOT HAVE BEEN ACCEPTED SINCE IT WAS
NONRESPONSIVE TO THE INVITATION FOR BIDS. IN VIEW OF THE CONTRACTING
OFFICER'S STATEMENT THAT IT WAS HIS INTENTION THAT RACKS BE SUPPLIED AS
PART OF THE BASIC MACHINE AND SINCE THE LITERATURE SUBMITTED BY THE
CORPORATION WITH ITS BID SHOWS THAT IT WAS NOT ITS INTENTION TO SUPPLY
THE RACKS AS STANDARD EQUIPMENT, WE BELIEVE THAT IT MAY REASONABLY BE
CONCLUDED THAT THERE WAS NO MEETING OF THE MINDS OF THE PARTIES IN
RESPECT TO THE SUBJECT MATTER OF THE PURCHASE AND, THEREFORE, THAT NO
BINDING CONTRACT WAS CONSUMMATED.
ACCORDINGLY, AN ADDITIONAL PAYMENT OF $128.40 IS AUTHORIZED TO BE
MADE TO THE FEARLESS DISHWASHER CO., INC., AS ADMINISTRATIVELY
RECOMMENDED, FOR THE RACKS DELIVERED BY THE CORPORATION.
THIS AMOUNT PLUS THE AMOUNT OF ITS ORIGINAL BID PRICE WILL STILL BE
LOWER THAN THE AMOUNT OF THE NEXT LOWEST BID RECEIVED ON THE DISHWASHING
MACHINES.
A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING
THE ADDITIONAL PAYMENT.
B-157884, NOV. 17, 1965
TO COLONEL KENNETH H. POWERS, USAF:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1965, REQUESTING
REVIEW OF THE ACTION TAKEN BY OUR CLAIMS DIVISION UNDER DATE OF
SEPTEMBER 28, 1965, IN DISALLOWING YOUR CLAIM FOR FLYING PAY FOR THE
PERIOD FEBRUARY 1, 1965, TO APRIL 30, 1965, INCLUSIVE, AT THE RATE OF
$245 PER MONTH, WHILE YOU WERE ATTACHED TO THE 6922D SECURITY WING,
USAFSS.
THE RECORD SHOWS THAT ON JANUARY 18, 1965, YOU WERE FOUND MEDICALLY
INCAPACITATED FOR FLYING AND THE OFFICIAL DIAGNOSIS MADE AT THAT TIME IS
SHOWN AS "DIABETES MELLITUS CODE D 2600 (4200 - ARTERIOSCLEROTIC HEART
DISEASE).' YOU WERE THEREFORE SUSPENDED FROM FLYING FOR A PERIOD NOT TO
EXTEND BEYOND THE LAST DAY OF APRIL 1965. MEDICAL TESTS ACCOMPLISHED ON
APRIL 27, 1965, ELIMINATED THE DIAGNOSIS OF DIABETES MELLITUS AND ON
APRIL 29, 1965, YOUR INCAPACITY FOR FLYING BY REASON OF ARTERIOSCLEROTIC
HEART DISEASE WAS CONFIRMED.
YOU CONTEND THAT SINCE YOUR HEART DISEASE WAS NOT CONFIRMED AS
INCAPACITATING UNTIL TWO DAYS AFTER IT WAS ESTABLISHED THAT YOU NO
LONGER WERE INCAPACITATED BY REASON OF DIABETES MELLITUS, YOU SHOULD
HAVE BEEN RETURNED TO FLYING STATUS ON APRIL 27, 1965, AND RETAINED
THEREON UNTIL PERMANENTLY SUSPENDED ON APRIL 29, 1965. YOU FURTHER
CONTEND THAT SINCE YOU WERE IN CATEGORY 3, IT MUST BE PRESUMED THAT YOU
COULD HAVE FLOWN THE 12 HOURS NEEDED TO QUALIFY FOR FLIGHT PAY FOR
FEBRUARY, MARCH AND APRIL.
INCENTIVE PAY FOR HAZARDOUS DUTY, INCLUDING FLYING DUTY, IS
AUTHORIZED BY 37 U.S.C. 301, SUCH PAYMENTS BEING "SUBJECT TO REGULATIONS
PRESCRIBED BY THE PRESIDENT.' THE PRESIDENT PRESCRIBED GENERAL
REGULATIONS IN EXECUTIVE ORDER 11157 DATED JUNE 22, 1964, 29 F.R. 7973,
SECTION 113 OF WHICH AUTHORIZES THE SECRETARIES OF THE DEPARTMENTS
CONCERNED TO PRESCRIBE SUCH SUPPLEMENTARY REGULATIONS AS THEY MAY DEEM
NECESSARY OR DESIRABLE FOR CARRYING OUT THE PRESIDENTIAL REGULATIONS.
ACCORDINGLY THE SECRETARY OF THE AIR FORCE HAS ISSUED DETAILED
REGULATIONS, PUBLISHED IN THE AIR FORCE MANUAL, GOVERNING PAYMENT OF
INCENTIVE PAY FOR FLYING DUTY IN VARIOUS SITUATIONS, INCLUDING
SUSPENSIONS FROM FLYING STATUS BECAUSE OF PHYSICAL INCAPACITY.
PARAGRAPH 2-33 OF AFM 35-13 PRESCRIBES THE PROCEDURE FOR REMOVING
SUSPENSIONS SUCH AS YOURS. THIS PARAGRAPH STATES, IN PART,"BEFORE A
SUSPENSION FOR PHYSICAL DISQUALIFICATION MAY BE REMOVED, THE OFFICER
MUST BE PHYSICALLY QUALIFIED FOR FLYING DUTY.' PARAGRAPH 2-34 SPECIFIES
THE OFFICERS WHO ARE AUTHORIZED TO REMOVE SUSPENSIONS FROM FLYING STATUS
AFTER THE PROVISIONS OF PARAGRAPH 2-33 HAVE BEEN COMPLIED WITH. THE
FORM OF ORDERS REVOKING SUSPENSION IS SHOWN IN PARAGRAPH 135 OF AFM
10-3, WHICH ALSO PROVIDES THAT THE EFFECTIVE DATE OF REVOCATION OF THE
SUSPENSION IS THE DATE THE ORDER IS ISSUED.
THERE IS NOTHING IN THE LAW OR IMPLEMENTING REGULATIONS WHICH COULD
BE CONSTRUED AS AUTHORITY FOR AUTOMATIC REVOCATION OF A SUSPENSION AND
RESTORATION TO FLYING STATUS UPON COMPLETION OF A MEDICAL TEST.
FURTHERMORE, ALTHOUGH YOUR HEART CONDITION WAS NOT CONFIRMED AS
INCAPACITATING UNTIL TWO DAYS AFTER THE DIABETES CONDITION WAS
ELIMINATED FROM THE DIAGNOSIS, IT IS CLEAR THAT SUCH HEART CONDITION WAS
SUSPECTED AT LEAST AS EARLY AS JANUARY 1965 AND IT APPEARS UNLIKELY THAT
YOU COULD HAVE BEEN FOUND PHYSICALLY QUALIFIED FOR FLYING DUTY ON APRIL
27, 1965, WHILE THAT CONDITION WAS UNDER MEDICAL CONSIDERATION.
REGARDLESS OF THE POSSIBILITIES, HOWEVER, THE FACT REMAINS THAT NO
MEDICAL DETERMINATION WAS MADE ON APRIL 27, 1965, THAT YOU WERE THEN
PHYSICALLY QUALIFIED FOR FLYING AND NO ORDER WAS ISSUED BY COMPETENT
AUTHORITY REVOKING THE SUSPENSION OF YOUR FLYING STATUS PRIOR TO APRIL
30, 1965.
SINCE YOU WERE GROUNDED BY REASON OF PHYSICAL INCAPACITY DURING THE
ENTIRE PERIOD OF YOUR CLAIM, FEBRUARY 1, 1965, TO APRIL 30, 1965,
INCLUSIVE, THERE IS NO AUTHORITY FOR PAYMENT OF FLYING PAY. THE
DISALLOWANCE OF YOUR CLAIM IS SUSTAINED.
WITH RESPECT TO YOUR INQUIRY AS TO ANY FURTHER ACTION YOU CAN TAKE IN
THIS MATTER YOU ARE ADVISED THAT UNDER 10 U.S.C. 1552 THE SECRETARY OF
THE AIR FORCE ACTING THROUGH THE BOARD FOR CORRECTION OF MILITARY
RECORDS IS AUTHORIZED TO CORRECT ANY MILITARY RECORD OF HIS DEPARTMENT
IN SITUATIONS WHERE HE FINDS SUCH ACTION "NECESSARY TO CORRECT AN ERROR
OR REMOVE AN INJUSTICE.'
B-158019, NOV. 17, 1965
TO REGIONAL MANAGER, VETERANS ADMINISTRATION SUPPLY DEPOT:
REFERENCE IS MADE TO YOUR REQUEST OF NOVEMBER 12, 1965, FOR A
DECISION WHETHER THE LOW BID SUBMITTED BY CASE-SWAYNE CO., INC., FOR
FURNISHING CERTAIN CITRUS JUICES--- ITEMS 2, 10 AND 19--- IN RESPONSE TO
INVITATION M4-163-66, SHOULD BE ACCEPTED.
THAT PORTION OF THE INVITATION DELIVERY CLAUSE PERTAINING TO ITEMS 2,
10 AND 19 STATED THAT ,DELIVERIES SHALL BE DETERMINED AFTER AWARD OF
CONTRACT AND SHALL BE AVAILABLE FOR SHIPMENT ON THE ORDER OF THE
VETERANS ADMINISTRATION AT ANY TIME DURING THE PERIOD BEGINNING DECEMBER
20, 1965 THRU MARCH 1966.' HOWEVER, THE BIDDER QUALIFIED ITS BID ON EACH
OF THE SUBJECT ITEMS BY PROVIDING FOR DELIVERY AFTER JANUARY 20, 1966.
YOU STATE THAT THE BIDDER ADVISED AFTER BID OPENING THAT IT QUALIFIED
DELIVERY BECAUSE IT THOUGHT THE VETERANS ADMINISTRATION WANTED JUICE
FROM FRUIT HARVESTED AFTER JANUARY 1966. IN THAT CONNECTION, YOU POINT
OUT THAT THE INVITATION STATES THAT THE JUICE WAS TO BE FROM FRUIT
HARVESTED AFTER JANUARY 1965.
IT IS AN ESTABLISHED RULE THAT THE FAILURE OF A BID TO CONFORM TO THE
DELIVERY REQUIREMENTS OF AN INVITATION FOR BIDS IS A MATERIAL DEVIATION
WHICH CANNOT BE WAIVED AND WHICH REQUIRES REJECTION OF THE BID. 34
COMP. GEN. 24.
THE BID OF CASE-SWAYNE ON ITEMS 2, 10 AND 19 SHOULD THEREFORE BE
REJECTED.
B-155504, NOV. 16, 1965
TO THE SECRETARY OF THE INTERIOR:
REFERENCE IS MADE TO LETTER DATED SEPTEMBER 8, 1965, WITH ENCLOSURES,
FROM THE ASSISTANT SECRETARY OF THE INTERIOR, REQUESTING OUR
DETERMINATION AS TO THE PROPRIETY OF MAKING PAYMENTS TO THE SURETIES AND
AN ASSIGNEE OF THE H AND M CONSTRUCTION COMPANY, A COPARTNERSHIP OF EL
CAJON, CALIFORNIA, AND A DEFAULTING CONTRACTOR.
IT IS STATED THAT FROM 1962 TO 1964 THE NATIONAL PARK SERVICE AWARDED
THE PARTNERSHIP SIX CONTRACTS FOR VARIOUS CONSTRUCTION AND
RECONSTRUCTION WORK IN SEQUOIA AND KINGS CANYON NATIONAL PARKS.
PROCEEDS OF ONE CONTRACT WERE PROPERLY ASSIGNED PURSUANT TO THE
ASSIGNMENT OF CLAIMS ACT, 31 U.S.C. 203. IN SEPTEMBER 1964, THE
CONTRACTING OFFICER RECEIVED NOTIFICATION THAT THE PROJECTS UNDERTAKEN
BY THE PARTNERSHIP WERE BEING CLOSED DOWN FOR LACK OF FUNDS. AS A
CONSEQUENCE, THE SIX CONTRACTS WERE TERMINATED FOR DEFAULT. IT IS
FURTHER STATED THAT AN ATTEMPT WAS MADE TO STOP PAYMENT ON A CHECK WHICH
THE GOVERNMENT HAD MISDELIVERED TO, AND WHICH WAS CONVERTED BY, THE
PARTNERSHIP. THIS CHECK, WHICH INCLUDED AMOUNTS DUE FOR WORK PERFORMED
UNDER THE ASSIGNED CONTRACT, SHOULD HAVE BEEN ISSUED AS SEVERAL CHECKS,
WITH ONE IN AN APPROPRIATE AMOUNT DELIVERED TO THE SAN DIEGO TRUST AND
SAVINGS BANK, AS ASSIGNEE.
IT APPEARS FROM THE RECORD THAT FIVE OF THE CONTRACTS WERE TAKEN OVER
BY THE SURETIES AND COMPLETED BY THEM. THE SIXTH CONTRACT IS NOT
COMPLETED, WHICH IS THE CONTRACT INVOLVING THE ASSIGNMENT OF FUNDS TO
THE SAN DIEGO BANK AND THE MISDELIVERED CHECK.
INFORMATION PREVIOUSLY FURNISHED INDICATES THAT IN FOUR OF THE FIVE
CONTRACTS COMPLETED BY THE SURETIES, THE COSTS OF COMPLETION FROM THE
DATE OF TAKE-OVER BY THE SURETIES EXCEED THE NET AMOUNT HELD BY THE
GOVERNMENT AS THE UNEXPENDED BALANCE DUE UNDER THE CONTRACTS BUT
UNEARNED BY THE DEFAULTING CONTRACTOR, LESS LIQUIDATED DAMAGES FOR LATE
COMPLETION. IN THE FIFTH CONTRACT, THE SURETY'S COMPLETION COSTS ARE
EXCEEDED BY THE UNEXPENDED BALANCE DUE UNDER THE CONTRACT FROM THE DATE
OF THE SURETY'S TAKE-OVER LESS LIQUIDATED DAMAGES. THE SIXTH CONTRACT
INVOLVING THE ASSIGNMENT TO THE SAN DIEGO BANK AND THE ERRONEOUS
PAYMENT, IS CONSIDERED SEPARATELY.
IN UNITED STATES V. MUNSEY TRUST CO., RECEIVER, 332 U.S. 234, IT WAS
HELD, QUOTING FROM THE SYLLABUS, THAT:
"1. NOTWITHSTANDING CLAIMS OF A SURETY ON A STATUTORY PAYMENT BOND
(GIVEN UNDER 40 U.S.C. SEC. 270A) FOR REIMBURSEMENT FOR SUMS PAID TO
LABORERS AND MATERIALMEN, THE GOVERNMENT MAY SET OFF, AGAINST
UNAPPROPRIATED PERCENTAGES OF PROGRESS PAYMENTS WITHHELD BY IT AND DUE
TO THE CONTRACTOR ON THE CONSTRUCTION CONTRACT, A DEBT OWED TO IT BY THE
CONTRACTOR AS A RESULT OF A SEPARATE AND INDEPENDENT TRANSACTION. PP.
236-244.
"4. WITH REFERENCE TO WITHHELD AND UNAPPROPRIATED PERCENTAGES OF
PROGRESS PAYMENTS ON A CONSTRUCTION CONTRACT, PERFORMANCE OF WHICH HAS
BEEN COMPLETED AND ACCEPTED, THE GOVERNMENT IS NOT A MERE GENERAL
CREDITOR BUT A SECURED CREDITOR ENTITLED TO WITHHOLD WHAT IT OWES THE
CONTRACTOR UNTIL IT IS PAID WHATEVER THE CONTRACTOR OWES THE GOVERNMENT.
P. 240.
"6. THE RIGHT OF THE GOVERNMENT TO RETAINED PERCENTAGES OF PROGRESS
PAYMENTS ON A CONSTRUCTION CONTRACT DOES NOT DEVOLVE ON A SURETY WHO HAS
PAID LABORERS AND MATERIALMEN, SO AS TO PREVENT THE GOVERNMENT FROM
APPLYING THE UNAPPROPRIATED SUM TO THE SATISFACTION OF ITS OWN CLAIM
GROWING OUT OF A SEPARATE AND INDEPENDENT TRANSACTION. PP. 242-243.'
IN OUR DECISION OF AUGUST 10, 1960, 40 COMP. GEN. 85, WE STATED:
"IN 31 COMP. GEN. 103 WE CONSIDERED THE VALIDITY AND EFFECT OF AN
AGREEMENT ENTERED INTO BETWEEN THE GOVERNMENT AND A SURETY FOR
COMPLETION OF A CONTRACT ON WHICH THE PRINCIPAL WAS IN DEFAULT, AND
CONCLUDED THAT THE UNDERTAKING OF THE SURETY TO COMPLETE THE WORK WAS
ADEQUATE CONSIDERATION FOR THE GOVERNMENT'S AGREEMENT TO PAY THE
CONTRACT BALANCE IN ITS HANDS TO THE SURETY, TO THE EXTENT OF ITS ACTUAL
COST OF COMPLETION OF THE CONTRACT, EXCLUSIVE OF ANY EXPENDITURES UNDER
THE PAYMENT BOND.
"WHILE IN THAT CASE THE AGREEMENT, AS WE CONSTRUED IT DID NOT PURPORT
TO OBLIGATE THE GOVERNMENT TO PAY THE SURETY ANY PART OF THE RETURNED
PERCENTAGES OF PAYMENTS EARNED BY THE CONTRACTOR, WE TOOK THE POSITION
THAT THE GOVERNMENT COULD NOT, WITHOUT THE CONSENT OF THE PRINCIPAL,
AGREE TO PAY TO THE SURETY ANY PART OF THE EARNED BUT UNPAID PROGRESS
ESTIMATES OR RETAINED PERCENTAGES WHICH MIGHT BE IN EXCESS OF THE
SURETY'S COST OF COMPLETION. FURTHERMORE, WE POINTED OUT THAT THE
PRINCIPAL'S CONSENT IN THAT SITUATION WOULD CONSTITUTE AN ASSIGNMENT OF
HIS RIGHTS AGAINST THE GOVERNMENT WHICH WOULD NOT BE ENFORCEABLE AGAINST
THE GOVERNMENT, AND WOULD NOT AFFECT THE GOVERNMENT'S RIGHT OF SET-OFF
FOR ANY DEBT OWING TO IT BY THE CONTRACTOR.
"IN THE ABSENCE OF ANY CLEAR JUDICIAL AUTHORITY TO THE CONTRARY, WE
BELIEVE, THAT WE SHOULD ADHERE TO THE VIEWS EXPRESSED IN 31 COMP. GEN.
103, AND REGARD AS UNAUTHORIZED AND CONTRARY TO THE
INTEREST OF THE GOVERNMENT ANY PURPORTED UNDERTAKING BY THE
GOVERNMENT TO APPLY UNPAID PROGRESS ESTIMATES OR RETAINED PERCENTAGES OF
A DEFAULTING CONTRACTOR TO REIMBURSEMENT OF A COMPLETING SURETY FOR
PAYMENT BOND DISBURSEMENTS, FREE OF ANY RIGHT OF SET-OFF FOR ANY CLAIM
OF THE GOVERNMENT AGAINST THE CONTRACTOR.'
THE CONTRACTS WITH THE SURETIES FOR COMPLETION OF THE PROJECTS HERE
ARE SUBSTANTIALLY THE SAME AS THE CONTRACT CONCERNED IN 31 COMP. GEN.
103.
IN APPLYING THE RATIONALE OF 31 COMP. GEN. 103 TO THE FIVE COMPLETED
CONTRACTS, IT IS OUR VIEW THAT THE UNEXPENDED CONTRACT BALANCE IN EACH
INSTANCE MUST BE REDUCED BY THE LIQUIDATED DAMAGES ASSESSED UNDER THE
CONTRACT CONCERNED AND THE REMAINDER OF THE UNEXPENDED CONTRACT BALANCES
MAY BE PAID TO THE COMPLETING SURETY IN AMOUNTS NOT TO EXCEED ITS
EXPENSES INCURRED IN COMPLETING THE CONTRACTS FROM THE DATE OF ITS
TAKEOVER. WHERE THE UNEXPENDED CONTRACT BALANCE EXCEEDS SUCH COMPLETION
COSTS, THE REMAINDER IS CONSIDERED AS DUE THE SURETY'S PRINCIPAL AS ARE
OTHER WITHHELD EARNED SUMS, AND AS SUCH IT IS AVAILABLE TO THE
GOVERNMENT FOR OFFSET AGAINST AMOUNTS DUE THE GOVERNMENT BY REASON OF
OTHER TRANSACTIONS. IN THE EVENT THAT THE GOVERNMENT HAS NO CLAIM
AGAINST THE PRINCIPAL, OR IF THERE IS A REMAINDER AFTER ACCOMPLISHING
THE OFFSET, THE TOTAL OF THE SUMS DUE THE PRINCIPAL, INCLUDING WITHHELD
PERCENTAGES AND UNPAID EARNED BALANCES, SHOULD BE PAID TO THE PRINCIPAL,
OR AS IN THE PRESENT CASES, WHERE THE PRINCIPAL IS BANKRUPT, TO THE
TRUSTEE IN BANKRUPTCY, ON HIS DEMAND. IN THIS CONNECTION, IT MAY BE
OBSERVED THAT INSOFAR AS THE SURETIES ARE CONCERNED, WE HAVE
CONSISTENTLY TAKEN THE POSITION THAT A PAYMENT BOND SURETY'S RIGHT TO
PRIORITY OVER OTHER CLAIMANTS CANNOT OTHERWISE BE RECOGNIZED UNTIL THE
SURETY HAS SATISFIED ALL CLAIMS FOR LABOR AND MATERIALS FURNISHED IN
CONNECTION WITH THE PERFORMANCE OF THE CONTRACT WORK.
SEE UNITED STATES V. NATIONAL SURETY COMPANY, 254 U.S. 73, AND
AMERICAN SURETY COMPANY V. WESTINGHOUSE ELECTRIC MANUFACTURING COMPANY,
ET AL., 296 U.S. 133. SEE ALSO B-157563, OCTOBER 26, 1965. THE
SURETIES MAY THEN PRESENT THEIR CLAIMS FOR PRIORITY TO THE TRUSTEE IN
BANKRUPTCY, AND A JUDICIAL DETERMINATION OF THEIR RIGHTS OBTAINED. IN
ANY EVENT THE GOVERNMENT WOULD SUCCEED IN OBTAINING A GOOD AND VALID
ACQUITTANCE FOR THE SUMS BEING HELD AS STAKEHOLDER.
AS TO THE SIXTH CONTRACT, CONTRACT NO. 14-10-1436-407, IT APPEARS
THAT AN ASSIGNMENT WAS MADE TO SAN DIEGO TRUST AND SAVINGS BANK OF ALL
MONIES DUE OR TO BECOME DUE UNDER THE ABOVE CONTRACT, WHICH ASSIGNMENT
WAS MADE UNDER THE ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED.
PROGRESS PAYMENTS WERE MADE UNDER THIS CONTRACT TO THE SAN DIEGO BANK UP
TO THE TIME OF DEFAULT, WITH THE EXCEPTION OF THE LAST PAYMENT OF
$28,929.62 WHICH WAS ERRONEOUSLY INCLUDED IN A CHECK PAYABLE TO H AND M
AS PROGRESS PAYMENTS ON THREE OTHER CONTRACTS. H AND M DID NOT FORWARD
TO THE SAN DIEGO BANK THAT PART OF THE CHECK REPRESENTING THE PROGRESS
PAYMENT ON THE ASSIGNED CONTRACT. FOLLOWING DEFAULT ON THIS ASSIGNED
CONTRACT AND THE BANKRUPTCY OF H AND M, THE GOVERNMENT AND THE SURETY
ENGAGED A CONTRACTOR TO COMPLETE THE CONTRACT FOR THE UNEXPENDED
CONTRACT BALANCE. AT THIS TIME, AND AFTER DEFAULT OF H AND M, THE
ORIGINAL CONTRACTOR, THE SURETY HAD INCURRED CONSIDERABLE EXPENSE UNDER
ITS BOND TO THE GOVERNMENT, AND THE GOVERNMENT HAD IN ITS POSSESSION
RETAINED PERCENTAGES OF PROGRESS PAYMENTS, EARNED BY H AND M PRIOR TO
DEFAULT. LIQUIDATED DAMAGES FOR DELAY IN COMPLETION HAVE NOT BEEN
ASSESSED, AND, IN ADDITION, THE GOVERNMENT HAS A CLAIM AGAINST H AND M
IN THE AMOUNT OF THE ERRONEOUS PAYMENT TO THEM DESCRIBED ABOVE. THE SAN
DIEGO TRUST AND SAVINGS BANK HAS PRESENTED ITS CLAIM FOR THE AMOUNT
ERRONEOUSLY PAID TO H AND M WHICH SHOULD HAVE BEEN PAID TO THE BANK, AS
ASSIGNEE. THE SURETY CLAIMS THE AMOUNT OF RETAINED EARNINGS AS
REIMBURSEMENT FOR ITS BOND EXPENSES.
AS TO THE CLAIM OF THE SAN DIEGO BANK WE PERCEIVE NO BASIS FOR THE
GOVERNMENT'S FURTHER FAILURE TO PAY THE AMOUNT WHICH SHOULD HAVE BEEN
PAID PURSUANT TO THE ASSIGNMENT.
HOWEVER, THE GOVERNMENT HAS THE RIGHT OF SET-OFF AGAINST AMOUNTS DUE
H AND M FOR CLAIMS OF THE GOVERNMENT, THAT IS, LIQUIDATED DAMAGES AND
THE AMOUNT OF THE ERRONEOUS PAYMENT TO H AND M. IN THIS REGARD,
WITHHELD BALANCES UNDER ALL THE CONTRACTS ARE AVAILABLE FOR THE SET-OFF
OF THE ERRONEOUS PAYMENT. SEE UNITED STATES V. MUNSEY TRUST CO., SUPRA.
WE HAVE AVOIDED, IN THIS DECISION, DISCUSSION OF EXACT AMOUNTS
CONCERNED UNDER EACH CONTRACT, SINCE WE BELIEVE THE COMPUTATIONS OF
AMOUNTS DUE TO AND FROM THE GOVERNMENT SHOULD BE CAREFULLY REVIEWED
PRIOR TO EXECUTION OF THE NECESSARY VOUCHERS AND PAYMENT THEREOF.
B-157597, NOV. 16, 1965
TO NORVILLE, WALSH, CASE AND RITCHIE:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 31, 1965,
PROTESTING, ON BEHALF OF REPP INDUSTRIES, INC., GARDINER, NEW YORK,
AGAINST THE ACTION OF THE CONTRACTING OFFICE AT FORT DETRICK, FREDERICK,
MARYLAND, IN REJECTING THE CORPORATION'S BID SUBMITTED IN RESPONSE TO
INVITATION FOR BIDS NO. AMC (A) 18-064-65-113. RECEIPT IS ALSO
ACKNOWLEDGED OF YOUR LETTER OF SEPTEMBER 1, 1965, WITH ENCLOSURES.
ON JANUARY 22, 1965, THE UNITED STATES ARMY BIOLOGICAL LABORATORIES,
FORT DETRICK, MARYLAND, ISSUED A REQUEST FOR TECHNICAL PROPOSALS FOR THE
MANUFACTURE OF VARIABLE CAPACITY STAINLESS STEEL FERMENTORS FOR USE IN
TISSUE CULTURE PROPAGATION. AT THAT TIME A TWO-STEP FORMAL ADVERTISING
PROCEDURE WAS COMTEMPLATED. SIX PROPOSALS WERE RECEIVED AND UPON A
TECHNICAL EVALUATION THEREOF IT WAS FOUND THAT THERE WERE AREAS IN ALL
THE PROPOSALS RECEIVED WHICH NEEDED TO BE CLARIFIED WITH REGARD TO THE
VARIOUS DESIGNS OFFERED. THEREFORE, TECHNICAL DISCUSSIONS WERE
CONDUCTED SEPARATELY WITH EACH OF THE COMPANIES WHICH RESPONDED. AS A
RESULT OF THESE DISCUSSIONS, ONE COMPANY VOLUNTARILY WITHDREW FROM THE
COMPETITION AND THE REMAINING FIVE WERE PERMITTED TO AMEND THEIR
PROPOSALS ON THOSE AREAS AS TO WHICH CLARIFICATION WAS REQUIRED. UPON A
FINAL TECHNICAL EVALUATION IT WAS FOUND THAT THE PROPOSALS OF FOUR
FIRMS, INCLUDING THAT OF REPP INDUSTRIES, NC., WERE TECHNICALLY
ACCEPTABLE.
UNDER STEP TWO, INVITATION FOR BIDS NO. AMC (A) 18-064-65-113 WAS
ISSUED ON MAY 17, 1965, TO THE FOUR COMPANIES WHOSE TECHNICAL PROPOSALS
WERE DETERMINED TO BE ACCEPTABLE UNDER STEP ONE.
THE FOLLOWING FOUR BIDS WERE RECEIVED:
CHART
REPP INDUSTRIES, INC. $150,504
NEW BRUNSWICK SCIENTIFIC COMPANY 158,800
STAINLESS STELL PRODUCTS COMPANY 164,000
ARISAN INDUSTRIES, INC. 208,720
SINCE REPP INDUSTRIES, INC., WAS THE LOWEST BIDDER, PURSUANT TO ARMED
SERVICES PROCUREMENT REGULATION (ASPR) 1-905.4, A PREAWARD SURVEY WAS
CONDUCTED OF THE RESPONSIBILITY OF THAT CORPORATION AS A PROSPECTIVE
GOVERNMENT CONTRACTOR AND IT WAS CONCLUDED THEREFROM THAT THE
CORPORATION DID NOT MEET THE MINIMUM STANDARDS OF RESPONSIBILITY
PRESCRIBED BY ASPR 1-903.2 AND, THEREFORE, ITS BID WAS REJECTED. A
CERTIFICATE OF COMPETENCY AS TO THE CORPORATION'S CAPACITY AND CREDIT
WAS NOT REQUESTED SINCE IT DID NOT QUALIFY AS A SMALL BUSINESS CONCERN
BECAUSE OF THE FACT THAT IT IS A WHOLLY OWNED SUBSIDIARY OF CENCO
INSTRUMENTS CORPORATION, A LARGE BUSINESS CONCERN.
IN YOUR LETTER OF SEPTEMBER 1, 1965, YOU STATE THAT, AS LOW BIDDER,
REPP INDUSTRIES, INC., SHOULD RECEIVE THE AWARD OF THE CONTRACT AND THAT
THE REJECTION OF THE CORPORATION'S BID WAS DUE TO A MISUNDERSTANDING ON
THE PART OF THE CONTRACTING OFFICER OF THE CAPABILITIES AND FINANCIAL
RESPONSIBILITY OF THE CORPORATION. YOU STRESS THE FACT THAT REPP
INDUSTRIES, INC., IS A WHOLLY OWNED SUBSIDIARY OF THE CENCO INSTRUMENTS
CORPORATION, A LARGE BUSINESS CORPORATION DOING BUSINESS
IN EXCESS OF $50 MILLION ANNUALLY.
THE RECORD INDICATES THAT IN MAKING HIS DETERMINATION AS TO THE
NONRESPONSIBILITY OF REPP INDUSTRIES, INC., THE CONTRACTING OFFICER DID
NOT QUESTION THE CORPORATION'S ABILITY TO OBTAIN FINANCIAL SUPPORT FROM
ITS PARENT COMPANY, CENCO INSTRUMENTS CORPORATION, TO THE EXTENT SUCH
SUPPORT MAY BE NEEDED TO PERFORM THE PROPOSED CONTRACT. IN REGARD TO
AFFILIATED CONCERNS, ASPR 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. SINCE THE BID IN QUESTION WAS NOT
SUBMITTED BY CENCO INSTRUMENTS CORPORATION, NOR BY ITS SUBORDINATE
CONCERNS AS JOINT VENTURES, IT APPEARS THAT ONLY THE CAPABILITIES OF
REPP INDUSTRIES, INC., TO PERFORM THE CONTRACT ARE PERTINENT TO THE
QUESTION INVOLVED. THE RECORD INDICATES THAT THE BASES FOR THE
CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY ARE THAT REPP
INDUSTRIES, INC., IS ONLY A SALES AGENCY OR SALES BROKER WITH ONLY
TWO PEOPLE ON ITS PAYROLL, ONE AN ELECTRICAL ENGINEER WHO SERVES AS
GENERAL MANAGER, AND THE OTHER AN ELECTRONICS TECHNICIAN; THAT THE
CORPORATION HAS NO FACILITIES OR EQUIPMENT; THAT IT PROPOSES TO UTILIZE
THE ENGINEERING, FABRICATION AND ASSEMBLY CAPABILITIES, FACILITIES AND
EQUIPMENT OF TWO OTHER AFFILIATED FIRMS OVER WHICH THERE IS NO EVIDENCE
OF CONTROL OR EXISTING BUSINESS OR WORKING AGREEMENTS, AND WHICH
THEMSELVES HAVE HAD NO PREVIOUS EXPERIENCE IN THE DESIGN
AND FABRICATION OF THE HIGHLY TECHNICAL ITEMS CALLED FOR BY THE
INVITATION FOR BIDS. THE CONTRACTING OFFICER ALSO STATES THAT REPP
INDUSTRIES, INC., DOES NOT QUALIFY AS A MANUFACTURER OR REGULAR DEALER
UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT OF JUNE 30, 1936, AS
AMENDED, 41 U.S.C. 35.
WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S
RESPONSIBILITY IS PRIMARILY THAT OF THE CONTRACTING AGENCY AND NOT OF
OUR OFFICE AND IS BINDING ON THE GENERAL ACCOUNTING OFFICE IN THE
ABSENCE OF BAD FAITH OR A REASONABLE BASIS FOR THE DETERMINATION MADE.
33 COMP. GEN. 549; 37 ID. 430; 39 ID. 705; 43 ID. 257. THE COURTS
HAVE ALSO ADOPTED A SIMILAR VIEW. O-BRIEN V. CARNEY, 6 F.SUPP. 761;
FRIEND V. LEE, 221 F.2D 96. IN OUR CONSIDERATION OF THE FACTS AND
CIRCUMSTANCES OF THIS CASE THERE HAS BEEN FOUND NO SUFFICIENT BASIS FOR
CONCLUDING THAT THE DETERMINATION OF THE CORPORATION'S LACK OF
RESPONSIBILITY WAS NOT BASED UPON A FULL AND HONEST INVESTIGATION OF ITS
QUALIFICATIONS.
B-157760, NOV. 16, 1965
TO MR. LOUIS E. HOLMES, AUTHORIZED CERTIFYING OFFICER, FEDERAL
AVIATION AGENCY:
WE REFER TO YOUR LETTER OF SEPTEMBER 2, 1965, WITH ENCLOSURES,
REFERENCE SO-27, TRANSMITTING FOR OUR CONSIDERATION SEVERAL TRAVEL
VOUCHERS IN FAVOR OF MR. CLARENCE L. GIBSON, AN EMPLOYEE OF THE FEDERAL
AVIATION AGENCY, AND REQUESTING OUR DECISION AS TO THE PAYMENTS THEREOF.
YOUR LETTER, WHICH WAS FORWARDED TO OUR OFFICE ON SEPTEMBER 24, 1965,
BY THE CHIEF, ACCOUNTING PROGRAMS DIVISION, FEDERAL AVIATION AGENCY,
WASHINGTON, D.C., READS, IN PART, AS FOLLOWS:
"MR. GIBSON'S OFFICIAL STATION IS LOCATED AT THE AIRPORT IN MERIDIAN,
MISSISSIPPI AND WHEN HE WAS REQUIRED TO PERFORM DUTY AT HIS OFFICIAL
STATION, HE MAINTAINED A LOCAL RESIDENCE AT 2920 HARRIS STREET,
MERIDIAN, MISSISSIPPI, SEVEN MILES FROM THE AIRPORT. I HAVE MAINTAINED
THAT THIS ADDRESS BE USED FOR COMPUTING ALLOWANCES FOR TRAVEL TO AND
FROM THE TERMINAL FOR THE PURPOSE OF TEMPORARY DUTY TRAVEL AS OUTLINED
IN STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, PARAGRAPHS 3.1.B AND 6.4.
"MR. GIBSON CONTENDS THAT HIS OFFICIAL RESIDENCE AT 106 MCGHEE
STREET, EVERGREEN, ALABAMA, SHOULD BE USED FOR POINT OF DEPARTURE AND
ARRIVAL IN COMPUTING ALLOWANCES FOR TEMPORARY DUTY TRAVEL, CLAIMING
$6.60 MAXIMUM TAXI FARE ALLOWABLE IN LIEU OF MILEAGE. THE MILEAGE FROM
EVERGREEN, ALABAMA, TO MERIDIAN, MISSISSIPPI IS 157 MILES.'
THE TEMPORARY DUTY TRAVEL IN QUESTION WAS PERFORMED DURING VARIOUS
PERIOD BETWEEN JULY 22, 1964, AND JULY 2, 1965. THE EVIDENCE INDICATES
THAT MR. GIBSON USED HIS PRIVATELY-OWNED AUTOMOBILE FOR TRAVEL TO AND
FROM THE AIRPORT TERMINAL IN MERIDIAN.
SECTION 3.1B OF THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS
(APPLICABLE TO THE PERIOD OF TRAVEL HERE INVOLVED) PROVIDES, IN PART, AS
FOLLOWS:
"REIMBURSEMENT FOR THE USUAL TAXICAB FARES FROM COMMON CARRIER OR
OTHER TERMINAL TO EITHER PLACE OF ABODE OR PLACE OF BUSINESS, OR FROM
EITHER PLACE OF ABODE OR PLACE OF BUSINESS TO COMMON CARRIER OR OTHER
TERMINAL, WILL BE ALLOWED IN AN AMOUNT NOT TO EXCEED $6 (PLUS TIP) * *
*"
SECTION 3.5B (1) OF THOSE REGULATIONS PROVIDES IN PART:
"IN LIEU OF THE USE OF TAXICAB UNDER SECTION 3.1B, PAYMENT ON A
MILEAGE BASIS AT THE RATE OF 10 CENTS PER MILE WILL BE ALLOWED FOR THE
ROUND-TRIP MILEAGE OF A PRIVATELY OWNED AUTOMOBILE USED IN CONNECTION
WITH AN EMPLOYEE GOING FROM EITHER HIS PLACE OF ABODE OR PLACE OF
BUSINESS: PROVIDED, THAT THE AMOUNT OF REIMBURSEMENT FOR ROUND-TRIP
MILEAGE WILL NOT IN EITHER INSTANCES EXCEED THE TAXICAB FARE, INCLUDING
TIP ALLOWABLE UNDER SECTION 3.1B FOR A ONE-WAY TRIP BETWEEN SUCH
APPLICABLE POINTS.'
PRIOR TO AUGUST 1, 1959, SECTION 3.1B OF THE STANDARDIZED GOVERNMENT
TRAVEL REGULATIONS AS REVISED EFFECTIVE JUNE 22, 1956, PROVIDED AS
FOLLOWS:
"THE USUAL TAXICAB FARES FROM STATION, WHARF, OR OTHER TERMINAL TO
EITHER PLACE OF ABODE OR PLACE OF BUSINESS AND FROM EITHER PLACE OF
ABODE OR PLACE OF BUSINESS TO STATION, WHARF, OR OTHER TERMINAL WILL BE
ALLOWED. (SEE SEC. 3.4.) FOR THE PURPOSE OF THIS SUBSECTION THE TERM
"PLACE OF ABODE" MAY BE CONSTRUED TO INCLUDE ANY POINT WITHIN REASONABLE
DISTANCE FROM WHICH THE EMPLOYEE CONCERNED COMMUTES DAILY TO HIS
OFFICIAL POST OF DUTY. * * *"
THE REGULATION QUOTED IMMEDIATELY ABOVE PROVED TO BE UNSATISFACTORY
SINCE THE "REASONABLE DISTANCE" LIMITATION AS PRESCRIBED THEREIN WAS
DIFFICULT TO APPLY IN CERTAIN CASES. EFFECTIVE AUGUST 1, 1959, SECTION
3.1B WAS AMENDED BY PLACING A MONETARY LIMITATION ON THE AMOUNT WHICH
WOULD BE ALLOWED FOR THE USE OF TAXICABS BETWEEN COMMON CARRIER TERMINAL
AND PLACE OF BUSINESS OR PLACE OF ABODE. IN VIEW OF THE MONETARY
LIMITATION PRESCRIBED BY THE NEW SECTION 3.1B, THE DISTANCE BETWEEN AN
EMPLOYEE'S PLACE OF ABODE AND OFFICIAL DUTY STATION CEASED TO BE THE
PRIME FACTOR. THEREFORE, THE DEFINITION OF THE TERM "PLACE OF ABODE"
(AS QUOTED ABOVE) WAS ELIMINATED FROM SECTION 3.1B.
HOWEVER, WHILE THAT TERM IS NO LONGER DEFINED IN SECTION 3.1B OF THE
REGULATIONS, IT IS OUR VIEW THAT THE TERM "PLACE OF ABODE," WHEN USED IN
THE STANDARDIZED GOVERNMENT TRAVEL REGULATIONS, IS INTENDED TO MEAN THE
PLACE FROM WHICH THE EMPLOYEE COMMUTES DAILY TO HIS OFFICIAL STATION.
SEE SECTIONS 6.3 (PARAGRAPH 2), 6.4, 6.8, 6.12D (3) AND 6.12E, OF THE
STANDARDIZED GOVERNMENT TRAVEL REGULATIONS.
IN THE PRESENT CASE, THE ADMINISTRATIVE OFFICE REPORTS THAT DURING
THE PERIOD IN QUESTION MR. GIBSON MAINTAINED A RESIDENCE IN MERIDIAN
FROM WHICH RESIDENCE HE COMMUTED DAILY TO HIS DUTY STATION AT THE
AIRPORT TERMINAL. HOWEVER, BY LETTER DATED NOVEMBER 1, 1965, MR.
GIBSON ADVISED OUR OFFICE THAT DURING THE TRAVEL PERIOD INVOLVED, HE
SPENT AN AVERAGE OF ONE NIGHT PER WEEK IN MERIDIAN, AND ON THOSE NIGHTS
HE STAYED IN A ROOM WHICH HE RENTED ON A DAILY BASIS. MR. GIBSON'S
STATEMENT IS SUPPORTED BY THE TRAVEL VOUCHERS WHICH INDICATE THAT HE DID
COMMUTE BETWEEN HIS RESIDENCE IN EVERGREEN AND THE TERMINAL IN MERIDIAN
IN CONNECTION WITH MOST OF HIS TEMPORARY DUTY TRAVEL ASSIGNMENTS.
THEREFORE, MR. GIBSON'S RESIDENCE IN EVERGREEN MAY PROPERLY BE
CONSIDERED AS A "PLACE OF ABODE" WITHIN THE MEANING OF THE TRAVEL
REGULATIONS AND THE VOUCHERS WHICH ARE RETURNED HEREWITH MAY BE
CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.
B-157875, NOV. 16, 1965
TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 15, 1965, WITH
ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE
REFORMATION OF CONTRACT NO. GS-09B-C-1721-SF, ENTERED INTO BETWEEN YOUR
ADMINISTRATION AND E. B. KILSTOFTE, WILMINGTON, CALIFORNIA, FOR THE
CONSTRUCTION OF A FEDERAL BUILDING AND UNITED STATES POST OFFICE IN
HARBOR CITY, LOS ANGELES, CALIFORNIA.
IT IS RELATED THAT IN THE PERFORMANCE OF THE SUBJECT CONTRACT, THE
CONTRACTOR, E. B. KILSTOFTE, ON APRIL 5, 1965, PAID TO THE CITY OF LOS
ANGELES THE SUM OF $1,537.50 FOR "CHARGE FOR BONDED AND SPECIAL SEWER
CONNECTIONS" BASED UPON THE FRONTAGE FOOT AREA AND THE SUM OF $367.31
FOR ,CONNECTION CHARGE FOR OUTLET FACILITIES" BASED UPON THE ACREAGE,
PURSUANT TO SECTIONS 64.18 AND 64.16.1 OF THE MUNICIPAL CODE OF LOS
ANGELES. SUCH PAYMENTS ARE EVIDENCED BY COPIES OF PAID RECEIPTS
SUBMITTED HERE AS PART OF THE RECORD. IT APPEARS THAT BEFORE KILSTOFTE
COULD PROCEED WITH HIS WORK UNDER THE CONTRACT, HE WAS REQUIRED BY THE
CITY OF LOS ANGELES TO PAY THE CHARGES IN QUESTION. HOWEVER, BEFORE
THESE CHARGES WERE PAID, THE CONTRACTOR, IN A LETTER DATED MARCH 8,
1965, TO THE GENERAL SERVICES ADMINISTRATION, STATED AS FOLLOWS:
"IN VIEW OF THE CIRCUMSTANCES UNDER WHICH THIS CLAIM IS MADE BY THE
CITY OF LOS ANGELES WE REQUEST OUR CONTRACT TO BE REFORMED TO INCLUDE
AND PROVIDE PAYMENT FOR THE SEWER CONNECTION.'
IN A MEMORANDUM DATED APRIL 20, 1965, FROM LAWRENCE A. HOFFMAN,
ASSISTANT CHIEF, DESIGN AND CONSTRUCTION DIVISION, REGION 9, GENERAL
SERVICES ADMINISTRATION, IT IS STATED AS FOLLOWS:
"THIS DIVISION HAD NO KNOWLEDGE OF ANY ACREAGE OF FRONT FOOT FEES
WHICH WOULD BE IMPOSED BY THE CITY OF LOS ANGELES, WHEN WE PREPARED THE
SPECIFICATIONS FOR THE WORK, OTHERWISE IT WOULD HAVE BEEN INCLUDED. THE
GENERAL CONDITIONS ON ALL SPECIFICATIONS FOR WORK OVER $2,000.00 CONTAIN
THE FOLLOWING REQUIREMENTS (GSA FORM 1139 SECTION 1-8 (C) );
" "THE CONTRACTOR SHALL OBTAIN AND PAY ALL FEES AND CHARGES FOR
CONNECTIONS TO OUTSIDE SERVICES AND FOR USE OF PROPERTY OUTSIDE THE
SITE.'
"AS STATED ABOVE, WE HAD NO KNOWLEDGE OF ADDITIONAL FEES AND ASSUMED
THAT THE CONNECTION CHARGES ORDINARILY CHARGED BY THE CITY WERE ALL THE
CHARGES INVOLVED. THE CONTRACTOR ALSO WAS NOT AWARE OF THE ACREAGE FEE
NOR THE FOOT FRONTAGE FEES CHARGED BY THE CITY OF LOS ANGELES.'
IN SUBSTANTIATION OF HIS CLAIM IN THIS MATTER, THE CONTRACTOR BY
SWORN STATEMENT DATED FEBRUARY 15, 1965, STATES THAT HE ONLY EXPECTED TO
PAY $18 FOR THE SEWER CONNECTION PERMIT AND THAT THE BONDED SEWER
CHARGES OR ACREAGE FEES WERE NOT INCLUDED IN HIS BID, NOR DID HIS
SUBCONTRACTORS INCLUDE SUCH CHARGES IN THEIR BIDS. THE RECORD CONTAINS
NOTARIZED STATEMENTS DATED FEBRUARY 5 AND 19, 1965, BY OFFICIALS OF JACK
WOOD AND J. H. STOCKTON, RESPECTIVELY, SUBCONTRACTORS, CORROBORATING THE
CONTRACTOR'S CONTENTION THAT THESE CHARGES WERE NOT INCLUDED IN THE BIDS
SUBMITTED BY THEM TO THE CONTRACTOR. CONSISTENT WITH THE CONTRACTOR'S
CONTENTIONS, IT IS STATED IN YOUR LETTER THAT THE GENERAL SERVICES
ADMINISTRATION DID NOT INTEND TO IMPOSE THE OBLIGATION OT PAY FOR THE
CHARGES IN QUESTION UPON THE CONTRACTOR, NOR DID THE CONTRACTOR INTEND
OR EXPECT TO PAY SUCH CHARGES. ALL THAT WAS COMTEMPLATED BY BOTH
PARTIES UNDER SECTION 1-8 (C) OF THE GENERAL CONDITIONS OF THE CONTRACT
WAS AN $18 SEWER CHARGE FOR A PERMIT IMPOSED BY THE CITY OF LOS ANGELES.
IN THIS CONNECTION YOU HAVE CITED OUR DECISION B-140837, DATED APRIL 7,
1960, WHICH WAS A RECONSIDERATION OF DECISION B-140837, DATED NOVEMBER
6, 1959, 39 COMP. GEN. 363, BASED ON ALMOST IDENTICAL FACTS AND THE SAME
SECTIONS OF THE LOS ANGELES CODE HERE INVOLVED, WHEREIN WE AUTHORIZED
PAYMENT BY THE GENERAL SERVICES ADMINISTRATION OF THE SAME CHARGES HERE
PRESENTED. IN VIEW OF THE FOREGOING, YOU ASK WHETHER YOUR
ADMINISTRATION MAY REIMBURSE THE CONTRACTOR FOR THE PAYMENT OF THE SAME
CHARGES IN THE PRESENT SITUATION.
AS STATED BY YOU, IN OUR DECISION OF APRIL 7, 1960, B-140837, WE HELD
THAT A WRITTEN AGREEMENT NOT CONFORMING TO THE ACTUAL INTENTION OF THE
PARTIES MAY BE REFORMED TO ACCORD WITH SUCH INTENTION. IT APPEARS TO BE
CLEARLY ESTABLISHED IN THE PRESENT SITUATION THAT BOTH PARTIES
CONTEMPLATED THAT THE CONTRACTOR SHOULD PAY ONLY THE ORDINARY SEWER
CONNECTION FEE OF APPROXIMATELY $18 AND NOT THE ACREAGE AND FRONT FOOT
FEES IMPOSED BY THE CITY OF LOS ANGELES IN THE AMOUNT OF $1,904.81. IN
VIEW THEREOF, WE WOULD OFFER NO OBJECTION TO MODIFICATION OF THE
CONTRACT TO PROVIDE THAT THE GENERAL SERVICES ADMINISTRATION SHALL
REIMBURSE THE CONTRACTOR FOR PAYMENT OF THE REFERRED-TO ACREAGE AND
FRONT FOOT FEES.
B-157136, NOV. 15, 1965
TO CHEMCO, INC:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 1, 1965,
PROTESTING AGAINST THE REJECTION OF YOUR BIDS AND THE AWARD OF TWO
CONTRACTS TO HOL-GAR MANUFACTURING CORPORATION, PRIMOS, PENNSYLVANIA, BY
THE DEPARTMENT OF THE ARMY PURSUANT TO INVITATIONS NOS. AMC
(T/-11-184-65-176- (A/-JD AND AMC (T/-11-184-65-177- (A/-JD, AS AMENDED,
HEREINAFTER REFERRED TO AS INVITATIONS NOS. 176 AND 177.
THE UNITED STATES ARMY MOBILITY EQUIPMENT CENTER, DIRECTORATE OF
PROCUREMENT AND PRODUCTION, ST. LOUIS, MISSOURI, BY THE REFERRED-TO
INVITATIONS REQUESTED BIDS FOR FURNISHING 2,573 GENERATOR SETS, 1.5 KW.,
D.C., AND 3,109 GENERATOR SETS, 1.5 KW., A.C. BOTH INVITATIONS WERE
100-PERCENT SET-ASIDES FOR SMALL BUSINESS. THE BIDS WERE OPENED ON JUNE
21, 1965, AND SINCE YOU WERE THE LOW BIDDER ON BOTH INVITATIONS A
PREAWARD FACILITIES SURVEY WAS MADE OF YOUR FIRM. IT WAS ESTABLISHED
THAT YOU WERE A NEWLY FORMED CONCERN, INCORPORATED JUNE 7, 1965,
UNDER THE LAWS OF THE STATE OF MINNESOTA, AND THAT YOU HAD NO PLANT OR
FACILITIES. IT IS REPORTED THAT ON JUNE 22, 1965, THE CONTRACTING
OFFICER WAS UNSUCCESSFUL IN AN ATTEMPT TO LOCATE OFFICIALS OF YOUR FIRM
BY TELEPHONE AT THE DULUTH, MINNESOTA, LOCATION SHOWN IN YOUR BIDS AS
THE SHIPPING POINT; THAT THE SMALL BUSINESS ADMINISTRATION IN DULUTH
COULD FIND NO RECORD OF YOUR FIRM; THAT A CALL TO YOUR WASHINGTON,
D.C., OFFICE RESULTED IN INFORMATION THAT YOUR FIRM HAD TWO FRANCHISES
IN DULUTH, MINNESOTA; AND THAT ON JUNE 25, 1965, THE CONTRACTING
OFFICER RECEIVED INFORMATION TO THE EFFECT THAT YOUR FIRM HAD NO FIRM
COMMITMENTS FOR A PLANT, BUT PROPOSED LOCATING IN SHAKOPEE, MINNESOTA,
IN A MONTH OR TWO. ON JUNE 29, 1965, MR. SIMON OF YOUR FIRM ADVISED THE
CONTRACTING OFFICE BY TELEPHONE THAT YOUR FIRM HAD OBTAINED A FACILITY
IN CHISHOLM, MINNESOTA, WHICH HE STATED WOULD BE AVAILABLE FOR
INSPECTION ON JULY 15, 1965, AND IN REPLY TO THE QUESTION AS TO WHETHER
YOUR FIRM WAS A MANUFACTURER OR A REGULAR DEALER, MR. SIMON REPLIED THAT
YOU WERE A MANUFACTURER. THIS QUESTION WAS PROMPTED BY THE FACT THAT
YOUR FIRM HAD FAILED TO INDICATE IN THE BOXES PROVIDED ON THE BID FORM
WHETHER YOUR FIRM WAS A REGULAR DEALER OR MANUFACTURER.
UNDER THE FOREGOING FACTS AND CIRCUMSTANCES THERE AROSE THE QUESTION
WHETHER YOUR FIRM COULD BE CONSIDERED A PROPER SOURCE OF SUPPLY WITHIN
THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35, AND
IMPLEMENTING REGULATIONS. PARAGRAPH 12-603.1 OF THE ARMED SERVICES
PROCUREMENT REGULATION (ASPR) PROVIDES THAT IN ORDER TO QUALIFY AS A
MANUFACTURER, A BIDDER MUST BE ABLE TO SHOW BEFORE AWARD IF HE IS NEWLY
ENTERING IN SUCH MANUFACTURING ACTIVITY, THAT HE HAS MADE ALL NECESSARY
PRIOR ARRANGEMENTS FOR SPACE, EQUIPMENT AND PERSONNEL TO PERFORM THE
MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT.
PARAGRAPH 2-404.2 THEREOF IMPOSES UPON ALL PROCUREMENT OFFICIALS THE
DUTY TO REJECT ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL
REQUIREMENTS OF THE INVITATION AND, IN THAT CONNECTION, THE OBLIGATION
TO DETERMINE THE ELIGIBILITY OF ANY BIDDER UNDER THE ABOVE-QUOTED
REGULATION, SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR. PURSUANT
THERETO THE CONTRACTING OFFICER FOUND YOUR FIRM TO BE UNQUALIFIED AS A
MANUFACTURER AT THAT TIME FOR THE PURPOSES OF THE PROCUREMENT INVOLVED
BASED UPON THE PREAWARD SURVEY. UPON REVIEW THAT FINDING WAS AFFIRMED
BY THE DEPARTMENT OF LABOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISION,
IN ITS LETTER OF JULY 20, 1965, TO THE CONTRACTING OFFICE. BY TELEGRAM
DATED AUGUST 16, 1965, THE CONTRACTING OFFICER ADVISED YOU THAT THE BIDS
OF YOUR FIRM UNDER THE INVITATIONS INVOLVED WERE BEING REJECTED BECAUSE
YOUR FIRM DID NOT QUALIFY AS A SOURCE OF SUPPLY WITHIN THE MEANING OF
THE WALSH-HEALY ACT AND THAT THIS FINDING WAS SUSTAINED BY THE
DEPARTMENT OF LABOR. ACCORDINGLY, AWARDS UNDER BOTH INVITATIONS WERE
MADE TO THE NEXT LOWEST BIDDER, HOL-GAR MANUFACTURING CORPORATION, ON
AUGUST 30, 1965.
BY TELEGRAM DATED SEPTEMBER 1, 1965, ADDRESSED TO THE CONTRACTING
OFFICE, YOU PROTESTED AGAINST THE REJECTION OF YOUR BIDS. YOU CONTEND
THAT YOUR FIRM MET THE MINIMUM STANDARDS FOR A RESPONSIVE AND
RESPONSIBLE BIDDER PRESCRIBED BY THE PROVISIONS OF ASPR 1-903 AND THAT
AS A SMALL BUSINESS MANUFACTURER BIDDING ON A 100-PERCENT SMALL BUSINESS
SET-ASIDE THE MATTER OF YOUR COMPETENCY SHOULD HAVE BEEN REFERRED TO THE
SMALL BUSINESS ADMINISTRATION (SBA) FOR ISSUANCE OF A CERTIFICATE OF
COMPETENCY AS TO CAPACITY AND CREDIT IN YOUR BEHALF.
IN VIEW OF THE FINDING OF THE CONTRACTING OFFICER THAT YOU DID NOT
QUALIFY AS A MANUFACTURER, WHICH FINDING WAS AFFIRMED BY THE DEPARTMENT
OF LABOR, AND THE PREAWARD SURVEY RESULTS, SO AUTHORITY EXISTED FOR
MAKING AWARD TO YOU AS PROSPECTIVE RESPONSIBLE CONTRACTOR. SEE ASPR
1-900 ET SEQ. THE AUTHORITY OF THE SBA TO ISSUE CERTIFICATES OF
COMPETENCY AS TO THE CAPACITY AND CREDIT OF A SMALL BUSINESS BIDDER DOES
NOT EXTEND TO DETERMINATIONS OF THE STATUS OF A BIDDER AS A REGULAR
DEALER OR MANUFACTURER UNDER 41 U.S.C. 35. SEE 37 COMP. GEN. 676.
THEREFORE, THE CONTRACTING OFFICER WAS NOT REQUIRED TO REFER THE MATTER
OF YOUR FIRM'S RESPONSIBILITY TO THE SBA FOR DETERMINATION.
IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE AWARDS MADE ARE
NOT SUBJECT TO LEGAL OBJECTION BY OUR OFFICE.
B-157508, NOV. 15, 1965
TO FIRST LIEUTENANT GLENN H. ANDERSON, USAR:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10, 1965,
PERTAINING TO YOUR CLAIM FOR ADDITIONAL PAY AND ALLOWANCES FOR TRAVEL
TIME INCIDENT TO TRAVEL STATED TO HAVE BEEN PERFORMED BY YOU FROM
ELMHURST, ILLINOIS, TO YOUR FIRST DUTY STATION, FORT SILL, OKLAHOMA, AS
A RESERVE OFFICER.
BY LETTER ORDERS NO. A-01-109, ISSUED BY HEADQUARTERS FIFTH UNITED
STATES ARMY, CHICAGO, ILLINOIS, ON JANUARY 17, 1962, YOU WERE ORDERED
WITH YOUR CONSENT TO SERVE FOR A PERIOD OF 24 MONTHS ON ACTIVE DUTY AND
ASSIGNED TO THE UNITED STATES ARMY GARRISON, FORT CARSON, COLORADO, WITH
APPROXIMATELY 8 WEEKS' TEMPORARY DUTY ENROUTE AT THE UNITED STATES ARMY
ARTILLERY AND MISSILE SCHOOL, FORT SILL, OKLAHOMA, TO ATTEND CLASS.
THOSE ORDERS WERE ADDRESSED TO YOU AT ELLIOTT, IOWA, APPARENTLY THE
PLACE WHERE YOU WERE RESIDING ON THE DATE OF THEIR ISSUANCE, AND
REQUIRED YOU TO REPORT TO FORT SILL NOT LATER THAN FEBRUARY 5, 1962.
THE VOUCHER COVERING THE PAYMENT OF MILEAGE TO YOU, $39,54 (659 MILES AT
6 CENTS PER MILE), IS SUPPORTED BY A WRITTEN STATEMENT OVER YOUR
SIGNATURE SHOWING THAT THE PLACE WHERE YOU RECEIVE THE ORDERS WAS
ELLIOTT AND THAT YOU DEPARTED FROM THAT CITY ON FEBRUARY 1, 1962, BY
PRIVATELY OWNED AUTOMOBILE, AND ARRIVED AT FORT SILL ON THE FOLLOWING
DAY. ALSO, THE FINANCE CENTER, U.S. ARMY, INDIANAPOLIS, INDIANA,
REPORTED THAT YOU WERE PAID PAY AND ALLOWANCES EFFECTIVE FEBRUARY 4,
1962, AS A SECOND LIEUTENANT, THE GRADE THEN HELD BY YOU, ALLOWING YOU 2
DAYS' TRAVEL TIME FOR THE DISTANCE BETWEEN ELLIOTT AND FORT SILL.
ON THE PREMISE THAT YOU SHOULD HAVE BEEN ALLOWED PAY AND ALLOWANCES
FROM YOUR HOME OF RECORD AT THE TIME OF THE ISSUANCE OF THE ORDERS,
ELMHURST, ILLINOIS, RATHER THAN FROM ELLIOTT, YOU FILED A CLAIM WITH THE
ARMY FOR ADDITIONAL PAY AND ALLOWANCES INASMUCH AS THE DISTANCE BETWEEN
ELMHURST AND FORT SILL IS APPROXIMATELY 886 MILES. IN A LETTER DATED
AUGUST 24, 1964, TO THE CLAIMS DIVISION, FINANCE CENTER, YOU STATED THAT
WHEN YOU "ENTERED SERVICE" YOU LEFT FROM ELMHURST AND THAT SINCE
ELMHURST RATHER THAN ELLIOTT WAS YOUR HOME OF RECORD YOU SHOULD HAVE
BEEN ALLOWED 3 OR 4 DAYS' INSTEAD OF 2 DAYS' PAY AND ALLOWANCES FOR THE
TRAVEL TIME TO FORT SILL. IN SUPPORT OF THE CLAIM YOU MADE REFERENCE TO
SPECIAL ORDERS NO. 14, ISSUED BY HEADQUARTERS, 5TH INFANTRY DIVISION
(MECHANIZED) AND FORT CARSON, FORT CARSON, COLORADO, DATED JANUARY 15,
1964, WHICH RELIEVED YOU FROM ACTIVE DUTY. THOSE ORDERS SHOW THAT
ELMHURST WAS YOUR HOME OF RECORD AND THAT YOUR PERMANENT ADDRESS WAS 300
HIGHLAND, ELMHURST.
ON APRIL 22, 1965, THE FINANCE CENTER, U.S. ARMY, FORWARDED YOUR
CLAIM AND RELATED PAPERS TO OUR CLAIMS DIVISION FOR APPROPRIATE ACTION.
BY SETTLEMENT DATED MAY 11, 1965, THAT DIVISION DISALLOWED YOUR CLAIM
FOR THE REASON THAT SINCE THE ORDERS OF JANUARY 17, 1962, WERE ADDRESSED
TO YOU AT ELLIOTT AND SINCE YOU WERE ENTITLED TO AND PAID THE MILEAGE
ALLOWANCE UNDER PARAGRAPH M4156, CASE 1, JOINT TRAVEL REGULATIONS,
PAYMENT OF AN ADDITIONAL AMOUNT IS NOT AUTHORIZED. THE FOREGOING
PROVISION IS TO THE EFFECT THAT WHEN ORDERS TO ACTIVE DUTY ARE RECEIVED
AT A PLACE OTHER THAN THAT TO WHICH THEY ARE ADDRESSED, TRAVEL
ALLOWANCES ARE AUTHORIZED FROM THE PLACE OF RECEIPT OF ORDERS, NOT TO
EXCEED ENTITLEMENT FROM THE PLACE TO WHICH ADDRESSED.
IN YOUR LETTER OF AUGUST 10, 1965, YOU PROTESTED THE SETTLEMENT
ACTION OF OUR CLAIMS DIVISION. YOU SAY IN THAT LETTER, AMONG OTHER
THINGS, THAT YOU WERE LIVING AT THE ELMHURST ADDRESS 5 MONTHS BEFORE YOU
RECEIVED YOUR "ORIGINAL ORDERS" AND THAT YOU TRAVELED FROM ELMHURST TO
FORT SILL WHEN YOU "ENTERED ACTIVE SERVICE.'
SECTION 201 (D) OF THE CAREER COMPENSATION ACT OF 1949, AS AMENDED BY
THE ACT OF MARCH 31, 1955, 69 STAT. 19, 37 U.S.C. 232 (D) (1958 ED.),
PROVIDES THAT IN ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE
PRESIDENT, IN CASE OF MEMBERS OF THE UNIFORMED SERVICES ORDERED TO
ACTIVE DUTY IN EXCESS OF 30 DAYS, ACTIVE DUTY SHALL INCLUDE "THE TIME
REQUIRED TO PERFORM TRAVEL" FROM HOME TO FIRST DUTY STATION AND FROM
LAST DUTY STATION TO HOME BY THE MODE OF TRANSPORTATION AUTHORIZED IN
ORDERS FOR SUCH MEMBERS. EXECUTIVE ORDER NO. 10153, AUGUST 17, 1950,
PRESCRIBING REGULATIONS UNDER THAT SECTION, PROVIDES THAT WHEN TRAVEL BY
PRIVATELY OWNED CONVEYANCE IS SPECIFICALLY AUTHORIZED IN CONNECTION WITH
REPORTING FOR ACTIVE DUTY AND TRAVEL IS SO PERFORMED, THE TRAVEL TIME TO
BE INCLUDED AS ACTIVE DUTY SHALL BE COMPUTED ON THE BASIS OF ONE DAY FOR
EACH 300 MILES TRAVELED, AND ONE DAY FOR EACH FRACTION OF 300 MILES IN
EXCESS OF 150 MILES TRAVELED. IT FURTHER PROVIDES THAT THE SECRETARIES
CONCERNED MAY PRESCRIBE SUCH SUPPLEMENTARY REGULATIONS AS THEY MAY DEEM
NECESSARY OR DESIRABLE FOR CARRYING OUT SUCH REGULATIONS. PARAGRAPH
20-21D (1), ARMY REGULATIONS 37-104, CHANGE 21, EFFECTIVE JANUARY 1,
1960, PROVIDED THAT THE PAY STATUS OF RESERVE MEMBERS CALLED TO ACTIVE
DUTY BEGINS ON THE DATE A MEMBER OFFICIALLY AND NECESSARILY COMPLIES
WITH THE ORDER CALLING HIM TO ACTIVE DUTY EITHER FOR TRAINING OR
MOBILIZATION AND EXTENDS TO AND INCLUDES THE DATE HE IS RELIEVED FROM
ACTIVE DUTY. PARAGRAPH 20-21 (D) (3) OF THE SAME REGULATION PROVIDED
THAT IN THE CASE OF MEMBERS CALLED OR ORDERED TO ACTIVE DUTY IN EXCESS
OF 30 DAYS, ACTIVE DUTY WILL INCLUDE THE TIME REQUIRED TO PERFORM TRAVEL
FROM HOME TO FIRST DUTY STATION, AND FROM LAST DUTY STATION TO HOME BY
THE MODE OF TRANSPORTATION AUTHORIZED IN ORDERS FOR SUCH MEMBERS.
UNDER THE LAW AND IMPLEMENTING REGULATIONS A MEMBER OF THE RESERVE
CALLED TO ACTIVE DUTY FOR A PERIOD IN EXCESS OF 30 DAYS AND SPECIFICALLY
AUTHORIZED TO USE A PRIVATELY OWNED CONVEYANCE FOR REPORTING TO ACTIVE
DUTY IS ENTITLED TO BE PAID THE PAY AND ALLOWANCES FOR HIS GRADE FOR THE
TIME OF ACTUAL OFFICIAL AND NECESSARY TRAVEL FROM HIS HOME TO FIRST DUTY
STATION BY PRIVATELY OWNED CONVEYANCE, BASED ON THE DISTANCE AS SHOWN IN
OFFICIAL HIGHWAY GUIDES AND ON THE TRAVEL TIME RATE APPLICABLE THERETO
AS SHOWN IN THE REGULATIONS. SUCH AUTHORIZATION CLEARLY IS NOT INTENDED
TO EXTEND TO TRAVEL IN EXCESS OF THAT NECESSARY TO ACCOMPLISH THE
REQUIREMENTS AND PURPOSE OF THE ORDERS. CONSEQUENTLY, WHERE ORDERS ARE
RECEIVED BY A MEMBER OF THE RESERVE AT A PLACE OTHER THAN HIS HOME AND
HE TRAVELS FROM SUCH PLACE TO HIS FIRST DUTY STATION BY PRIVATELY OWNED
CONVEYANCE, AS SPECIFICALLY AUTHORIZED IN SUCH ORDERS, THE LAW AND
REGULATIONS CONTEMPLATE PAYMENT OF PAY AND ALLOWANCES TO HIM FOR THE
TRAVEL TIME, AS INDICATED ABOVE, BASED ON THE DISTANCE BETWEEN THOSE
POINTS, PROVIDED SUCH DISTANCE DOES NOT EXCEED THE DISTANCE BETWEEN HIS
HOME AND FIRST DUTY STATION, SUCH BEING THE ONLY TRAVEL NECESSARY UNDER
THE ORDERS.
SINCE IT IS ESTABLISHED BY THE RECORD THAT YOU RECEIVED YOUR ORDERS
AT ELLIOTT AND THAT YOU TRAVELED FROM THAT CITY DIRECTLY TO FORT SILL,
THERE APPEARS TO BE NO LEGAL AUTHORITY TO PAY YOU ON THE BASIS OF THE
TRAVEL TIME COVERING THE DISTANCE BETWEEN YOUR HOME OF RECORD AT THE
TIME OF THE ISSUANCE OF THE 1962 ORDERS, ELMHURST, TO FORT SILL.
THEREFORE, THE PAYMENT OF PAY AND ALLOWANCES FOR 2 DAYS' TRAVEL TIME
MADE BY THE ARMY TO YOU WAS PROPER AND IN ACCORDANCE WITH THE GOVERNING
LAWS AND REGULATIONS.
ON THE BASIS OF THE PRESENT RECORD, THE SETTLEMENT OF MAY 11, 1965,
WAS CORRECT AND IS SUSTAINED.
B-157700, B-157292, NOV. 15, 1965
TO THE SECRETARY OF THE AIR FORCE:
REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 28, 1965, YOUR
DESIGNATION AFSPPCA, FORWARDING A REPORT ON THE PROTESTS OF MR. LEO F.
SULLIVAN AND MR. ROBERT CECIL HOKE AGAINST THE AWARD OF A CONTRACT UNDER
INVITATION FOR BIDS NO. 04-602-65-143 TO COMMERCIAL BUILDING MAINTENANCE
COMPANY. THE CONTRACT, IN THE AMOUNT OF $73,776, COVERS THE PERFORMANCE
OF CUSTODIAL SERVICES FOR 55 BUILDINGS LOCATED AT HAMILTON AIR FORCE
BASE, CALIFORNIA, DURING THE PERIOD FROM JULY 1, 1965, THROUGH JUNE 30,
1966. THE PROCUREMENT WAS A TOTAL SET-ASIDE FOR SMALL BUSINESS
CONCERNS.
THE RECORD SHOWS THAT BIDS WERE OPENED ON JUNE 3 AND THE THREE LOWEST
QUOTATIONS ON ALTERNATE A, WHICH WAS AWARDED, WERE AS FOLLOWS:
CHART
BIDDER PRICE
LEO F. SULLIVAN $ 58,454.76
COMMERCIAL BUILDING MAINTENANCE COMPANY 73,776.00
ROBERT CECIL HOKE 99,127.20
A NEGATIVE FACILITY CAPABILITY REPORT WAS RENDERED BY THE SAN
FRANCISCO CONTRACT MANAGEMENT DISTRICT AGAINST THE LOWEST BIDDER ON JUNE
28. BY CERTIFICATE DATED JUNE 29 THE CONTRACTING OFFICER DETERMINED
THAT TIME DID NOT PERMIT WITHHOLDING OF AWARD PENDING A DECISION BY THE
SMALL BUSINESS ADMINISTRATION WITH RESPECT TO THE ISSUANCE OF A
CERTIFICATE OF COMPETENCY.
MR. ROBERT CECIL HOKE, BY LETTERS DATED JULY 21 AND AUGUST 3 FROM HIS
ATTORNEYS ADDRESSED TO THE CONTRACTING OFFICER, PROTESTED, IN ACCORDANCE
WITH ARMED SERVICES PROCUREMENT REGULATION 1-703 (B) (1), THAT
COMMERCIAL BUILDING MAINTENANCE COMPANY WAS NOT A SMALL BUSINESS
CONCERN. THE CONTRACTING OFFICER REFUSED TO ENTERTAIN THE PROTEST
BECAUSE IT HAD NOT BEEN LODGED WITHIN FIVE WORKING DAYS AFTER BID
OPENING. NONETHELESS THE SMALL BUSINESS ADMINISTRATION, APPARENTLY ON
THE BASIS OF A DIRECT APPLICATION BY MR. HOKE, HAS DETERMINED IN A
DECISION DATED JULY 13, AFFIRMED IN A LETTER OF AUGUST 31, THAT THE
CONTRACTOR IS NOT A SMALL BUSINESS CONCERN. YOUR REPORT STATES IN THIS
REGARD:
"7. COMMERCIAL BUILDING MAINTENANCE COMPANY'S FAILURE TO FILE AN
APPLICATION FOR SIZE STATUS, TOGETHER WITH ITS TACIT ADMISSION ON 12
JULY 1965 TO THE SBA THAT IT WAS A LARGE BUSINESS, INDICATES THAT THERE
WAS BAD FAITH ON ITS PART IN MAKING THE REPRESENTATION THAT IT WAS A
SMALL BUSINESS.
"8. IT IS RECOMMENDED THAT CONTRACT AF 04 (602/-3751 WITH COMMERCIAL
BUILDING MAINTENANCE COMPANY BE CANCELLED AS VOID AND ILLEGAL.
"9. IT IS ALSO THE AIR FORCE'S RECOMMENDATION TO PROCURE THE
SERVICES RATHER THAN MAKE AN AWARD TO MR. ROBERT HOKE BECAUSE HIS BID
PRICE IS NOT CONSIDERED TO BE FAIR AND REASONABLE.'
SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW
85-536, 72 STAT. 390, 15 U.S.C. 637 (B) (6), EMPOWERS THE SMALL BUSINESS
ADMINISTRATION TO RENDER SIZE STATUS DETERMINATIONS WHICH ARE CONCLUSIVE
UPON AGENCIES OF THE GOVERNMENT HAVING PROCUREMENT POWERS. CF. 38 COMP.
GEN. 328, 331. IT IS WELL SETTLED THAT A BIDDER MUST QUALIFY AS A SMALL
BUSINESS IN ORDER TO BE ELIGIBLE TO BID ON AN INVITATION CONTAINING A
TOTAL SMALL BUSINESS SET-ASIDE, AND HE MUST ALSO QUALIFY AS SMALL
BUSINESS AT THE TIME OF RECEIVING THE AWARD. 42 COMP. GEN. 108, 112;
42 ID. 219, 221; 41 ID. 252; 40 ID. 550. SEE ALSO ARMED SERVICES
PROCUREMENT REGULATION 1-703 (B). IN ITS BID COMMERCIAL BUILDING
MAINTENANCE COMPANY EXPRESSLY REPRESENTED THAT IT WAS A SMALL
BUSINESS CONCERN AS DEFINED ON PAGE 4 OF THE INVITATION. CLEARLY,
THE BIDDER SHOULD HAVE ASSURED ITSELF REGARDING SIZE STATUS PRIOR TO BID
SUBMISSION. 41 COMP. GEN. 47, 54; CF. ASPR 1-703 (A) WHICH INSTRUCTS
CONTRACTING OFFICERS TO ACCEPT AT FACE VALUE A REPRESENTATION BY THE
BIDDER THAT IT IS A SMALL BUSINESS. WE BELIEVE THAT THE CIRCUMSTANCES
SUPPORT THE ADMINISTRATIVE CONCLUSION OF BAD FAITH.
IN 41 COMP. GEN. 47 WE DIRECTED THE CANCELLATION OF AN AWARD UNDER A
TOTAL SMALL BUSINESS SET-ASIDE TO A BIDDER WHO, BOTH AT THE TIME THE BID
WAS SUBMITTED AND AT THE DATE OF AWARD, HAD NO REASONABLE GROUNDS TO
BELIEVE HIS COMPANY WOULD QUALIFY AS A SMALL BUSINESS CONCERN. ON THE
BASIS OF THIS PRECEDENT, OUR OFFICE WOULD NOT BE OBLIGED TO OBJECT TO
THE CANCELLATION OF THE AWARD IN THIS CASE.
THE LETTER ACCOMPANYING YOUR REPORT STATES THAT THE PRICE QUOTED BY
THE THIRD LOWEST BIDDER, MR. ROBERT CECIL HOKE IS UNREASONABLE. IF
THERE IS A STRONG POSSIBILITY OF OBTAINING A LOWER PRICE UPON
READVERTISEMENT OF THE REQUIREMENT IT WOULD NOT BE IN THE BEST INTEREST
OF THE GOVERNMENT TO MAKE AWARD TO MR. HOKE ON THE BASIS OF THIS BID.
THE SECRETARY OF THE AIR FORCE IS EMPOWERED BY 10 U.S.C. 2305 (C) TO
REJECT ALL BIDS UPON THE DETERMINATION THAT SUCH COURSE OF ACTION IS IN
THE PUBLIC INTEREST. ARMED SERVICES PROCUREMENT REGULATION 2-404.1 (B)
(VI) AUTHORIZES A CONTRACTING OFFICER TO CANCEL AN INVITATION WHERE ALL
OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT UNREASONABLE PRICES.
IN LIGHT OF THE FOREGOING OUR OFFICE WOULD NEITHER BE REQUIRED TO
OBJECT TO THE CANCELLATION OF THE AWARD TO COMMERCIAL BUILDING
MAINTENANCE COMPANY NOR TO THE READVERTISEMENT OF THE REQUIREMENT. THE
INCUMBENT CONTRACTOR MAY BE PAID ON A QUANTUM MERUIT BASIS FOR SERVICES
RENDERED UNTIL THE TIME WHEN A REPROCUREMENT MAY REASONABLY BE
EFFECTUATED AND A NEW CONTRACTOR BECOMES AVAILABLE TO UNDERTAKE THE
OBLIGATION OF PERFORMANCE.
WE ENCLOSE A COPY OF OUR LETTER OF TODAY TO THE SMALL BUSINESS
ADMINISTRATION AND COPIES OF DECISIONS TO MR. LEO SULLIVAN AND THE
ATTORNEYS REPRESENTING MR. ROBERT CECIL HOKE, DENYING THEIR RESPECTIVE
PROTESTS FOR THE REASONS SET FORTH THEREIN.
B-157700, NOV. 15, 1965
TO HALLEY, CORNELL AND WOLLENBERG:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 17, 1965,
PROTESTING ON BEHALF OF MR. ROBERT CECIL HOKE THE AWARD OF A CONTRACT
UNDER INVITATION FOR BIDS NO. 04-602-65-143 BY HAMILTON AIR FORCE BASE
TO COMMERCIAL BUILDING MAINTENANCE COMPANY.
BY A REPORT DATED SEPTEMBER 28, 1965, THE AIR FORCE HAS INFORMED US
THAT THE SMALL BUSINESS ADMINISTRATION HAS DETERMINED THE COMMERCIAL
BUILDING MAINTENANCE COMPANY TO HAVE BEEN INELIGIBLE FOR AWARD OF A
CONTRACT ON JUNE 29, 1965, UNDER A TOTAL SMALL BUSINESS SET-ASIDE. WE
HAVE NO OBJECTION TO THE DEPARTMENT'S INTENTION TO CANCEL THE AWARD.
WE HAVE BEEN ADVISED, HOWEVER, THAT THE AIR FORCE DOES NOT CONSIDER
THE BID OF YOUR CLIENT IN THE AMOUNT OF $99,127.20 TO BE A FAIR AND
REASONABLE PRICE FOR THE SERVICES TO BE RENDERED. THE SECRETARY OF THE
AIR FORCE IS EMPOWERED UNDER 10 U.S.C. 2305 (C) TO REJECT ALL BIDS WHERE
IT IS DEEMED THAT SUCH ACTION WOULD SERVE THE PUBLIC INTEREST. THIS
AUTHORITY HAS BEEN DELEGATED TO CONTRACTING OFFICERS BY ARMED SERVICES
PROCUREMENT REGULATION 2-404.1 (B) AND MAY BE EXERCISED ACCORDING TO
SUBPARAGRAPH (VI), WHEN ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT
PRICES CONSIDERED UNREASONABLE.
WE UNDERSTAND THAT THE CUSTODIAL SERVICES REQUIREMENT ORIGINALLY
COVERED UNDER THE AFOREMENTIONED INVITATION WILL BE READVERTISED IN THE
NEAR FUTURE. WE SUGGEST THAT YOUR CLIENT CONTACT THE BASE PROCUREMENT
OFFICE FOR FURTHER INFORMATION ON THE MATTER.
B-157738, NOV. 15, 1965
TO B AND F INSTRUMENTS, INCORPORATED:
WE REFER TO YOUR LETTERS OF SEPTEMBER 23 AND 28, 1965, WITH
ENCLOSURES, PROTESTING AN AWARD UNDER INVITATION FOR BIDS NO. C-263926,
TO OTHER THAN YOUR CONCERN.
THE ABOVE INVITATION WAS ISSUED ON AUGUST 30, 1965, BY THE NATIONAL
AERONAUTICS AND SPACE ADMINISTRATION, LEWIS RESEARCH CENTER, CLEVELAND,
OHIO, FOR THE PROCUREMENT OF SPECIFIED SIGNAL CONDITIONING SYSTEMS.
BIDS WERE OPENED ON SEPTEMBER 20, 1965, AND THE FOLLOWING BIDS WERE
RECEIVED:
CHART
NAME OF BIDDER UNIT PRICE AMOUNT
INDUSTRIAL ELECTRONIC SERVICE COMPANY $31,620 $126,480
ELECTRONIC SERVICES, INCORPORATED 33,656 134,624
B AND F INSTRUMENTS, INCORPORATED 38,000 152,000
ENDEVCO CORPORATION 42,338 169,352
TRANS-DATA, INCORPORATED ---- 177,260
WE ARE ADVISED THAT THE GOVERNMENT'S COST ESTIMATE FOR THIS
PROCUREMENT WAS $108,000.
PARAGRAPH 2 OF THE "BRAND NAME OR EQUAL" CLAUSE ON PAGE 4 OF THE
INVITATION PROVIDED:
"IF THE BIDDER PROPOSES TO MODIFY A PRODUCT SO AS TO MAKE IT CONFORM
TO THE REQUIREMENTS OF THE INVITATION FOR BIDS, HE SHALL (I) INCLUDE IN
HIS BID A CLEAR DESCRIPTION OF SUCH PROPOSED MODIFICATIONS AND (II)
CLEARLY MARK ANY DESCRIPTIVE MATERIAL TO SHOW THE PROPOSED
MODIFICATIONS.'
ON THE BASIS OF A TECHNICAL REVIEW BY THE PROCURING ACTIVITY IT WAS
FOUND THAT THE BIDS SUBMITTED BY INDUSTRIAL ELECTRONIC AND ELECTRONIC
SERVICES WERE NONRESPONSIVE SINCE THESE BIDDERS DID NOT CLEARLY MARK ON
THE DESCRIPTIVE DATA THE PROPOSED MODIFICATIONS WHICH WOULD MAKE THE
PRODUCT CONFORM TO THE REQUIREMENTS OF THE INVITATION.
NASA HAS ADVISED OUR OFFICE THAT IN VIEW OF THE BIDS RECEIVED
PURSUANT TO THIS INVITATION, A REVIEW WAS MADE BY THE LEWIS RESEARCH
CENTER TO DETERMINE WHETHER THE SYSTEMS SPECIFIED IN THE INSTANT
INVITATION WERE ESSENTIAL TO MEET NASA'S MINIMUM NEEDS OR WHETHER A LESS
EXPENSIVE SYSTEM, WITH REDUCED SIZE AND SCOPE WOULD BE ADEQUATE FOR THE
CENTER'S REQUIREMENTS. THE TECHNICAL DIVISION AT THE LEWIS RESEARCH
CENTER RECOMMENDED THAT THE INSTANT INVITATION BE CANCELLED, AND ADVISED
THE CONTRACTING OFFICER THAT A NEW PURCHASE REQUEST WITH MODIFIED
SPECIFICATIONS AND REDUCED QUANTITIES HAD BEEN PREPARED. THE
CONTRACTING OFFICER HAS ACCEPTED THIS RECOMMENDATION BY THE TECHNICAL
DIVISION OF THE LEWIS RESEARCH CENTER. ON THE BASIS OF THE RECORD
PRESENTED TO OUR OFFICE WE FIND NO BASIS TO OBJECT TO THE CONTRACTING
OFFICER'S DETERMINATION TO CANCEL THE INSTANT INVITATION. SEE B-143263,
DECEMBER 22, 1960.
B-157765, NOV 15, 1965
HEADNOTES-UNAVAILABLE
PRECIS-UNAVAILABLE
WRIGHT PATMAN, HOUSE OF REPRESENATIVES:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 15, 1965 AND ENCLOSURE,
ACKNOWLEDGING OUR LETTER OF OCTOBER 13, 1965, B-157765, CONCERNING THE
REQUEST OF THE WIFE OF TECHNICAL SERGEANT PAUL E. BARGER, AF 13216353,
THAT THEIR HOUSEHOLD GOODS BE SHIPPED FROM ENGLAND TO THE UNITED STATES
AT GOVERNMENT EXPENSE.
IN OUR LETTER OF OCTOBER 13, 1965, YOU WERE ADVISED THAT SINCE MRS.
BARGER RETURNED TO THE UNITED STATES AT HER OWN EXPENSE FROM SERGEANT
BARGER'S STATION WITH THE AIR FORCE IN ENGLAND IN JUNE 1965 WHEN SHE
SEPARATED FROM HER HUSBAND, IT APPEARS THAT NO AUTHORIZATION WAS ISSUED
FOR HER TRANSPORTATION UNDER PARAGRAPH M7103 OF THE JOINT TRAVEL
REGULATIONS AND, CONSEQUENTLY, THERE WOULD BE NO AUTHORITY AT THE
PRESENT TIME UNDER PARAGRAPH M8303-1 OF THE REGULATIONS FOR THE SHIPMENT
OF THESE HOUSEHOLD GOODS TO THE UNITED STATES AT GOVERNMENT EXPENSE. WE
EXPRESSED THE OPINION IN OUR LETTER THAT IF MRS. BARGER RETURNS TO
ENGLAND FOR THE PURPOSE OF HAVING HER HOUSEHOLD GOODS SHIPPED TO THE
UNITED STATES AT GOVERNMENT EXPENSE, SHE WOULD BE REQUIRED TO TRAVEL
OVER THERE AT PERSONAL EXPENSE AND UNDER THE PROVISIONS OF PARAGRAPH
3301 OF AIR FORCE MANUAL 75-4 MIGHT BE CONSIDERED AN UNAUTHORIZED
DEPENDENT AT HER HUSBAND'S OVERSEAS STATION IN WHICH CASE HER HUSBAND
WOULD BE FINANCIALLY RESPONSIBLE FOR HER RETURN TRANSPORTATION. WE ALSO
EXPRESSED THE OPINION THAT IF SHE RETURNS TO ENGLAND WITH NO INTENTION
OF RESIDING THERE, BUT MERELY FOR THE PURPOSE OF HAVING THE HOUSEHOLD
GOODS SHIPPED TO THE UNITED STATES, THERE WOULD BE NO PROPER BASIS UNDER
THE REGULATIONS FOR AUTHORIZING HER RETURN AND THE TRANSPORTATION OF THE
HOUSEHOLD GOODS TO THE UNITED STATES AT GOVERNMENT EXPENSE.
IN THE ENCLOSURE TO YOUR LETTER THE ASSISTANT SECRETARY OF DEFENSE
(COMPTROLLER) REFERS TO OUR DECISION TO THE EFFECT THAT HOUSEHOLD
EFFECTS MAY NOT BE MOVED AT GOVERNMENT EXPENSE INDEPENDENTLY OF THE
MOVEMENT OF THE DEPENDENTS AND SUGGESTS THAT THE CIRCUMSTANCES OF THIS
CASE INDICATE THE NEED FOR A FURTHER REFINEMENT OF THE RULE. YOU
REQUEST THAT WE RECONSIDER THE CASE IN THE LIGHT OF THE ASSISTANT
SECRETARY'S LETTER AND ADVISE YOU IF IT WOULD MAKE A DIFFERENCE IF THE
AIR FORCE WERE TO STIPULATE THAT UNDER THESE CIRCUMSTANCES THE AIR FORCE
COMMANDER IN ENGLAND WOULD CONSIDER MRS. BARGER A "COMMAND SPONSORED
DEPENDENT," AND WOULD AUTHORIZE PAYMENT OF HER TRAVEL AND HOUSEHOLD
GOODS EXPENSE IF SHE RETURNED TO ENGLAND. IT APPEARS TO BE YOUR VIEW
THAT IF SUCH ACTION WERE TAKEN, THE HOUSEHOLD EFFECTS COULD BE MOVED AT
GOVERNMENT EXPENSE WITHOUT THE ISSUANCE OF ORDERS OR ANY FURTHER TRAVEL
BY MRS. BARGER.
AS A GENERAL PROPOSITION TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD
EFFECTS AT GOVERNMENT EXPENSE IS AUTHORIZED ONLY WHEN A MEMBER IS
ORDERED TO MAKE A CHANGE OF PERMANENT STATION. 37 U. S. C. 406(A) AND
406(B). SECTION 406(H) OF TITLE 37, UNITED STATES CODE, AS ADDED BY
PUBLIC LAW 88-431 (78 STAT. 439) PROVIDES FOR THE ADVANCE RETURN OF
DEPENDENTS, BAGGAGE, AND HOUSEHOLD EFFECTS FROM OVERSEAS AREAS TO THE
UNITED STATES IN CERTAIN CASES WHEN IT IS DETERMINED TO BE IN THE BEST
INTERESTS OF THE MEMBER AND HIS DEPENDENTS AND THE UNITED STATES AND
ORDERS DIRECTING A CHANGE OF PERMANENT STATION FOR THE MEMBER CONCERNED
HAVE NOT BEEN ISSUED, OR WHEN THEY HAVE BEEN ISSUED BUT CANNOT BE USED
AS AUTHORITY FOR THEIR TRANSPORTATION. THE ENTIRE EMPHASIS OF THIS
EXCEPTION TO THE BASIC PROVISIONS OF THE LAW AND ITS LEGISLATIVE HISTORY
IS UPON THE NEED FOR ADVANCE RETURN OF DEPENDENTS. NOTHING WHATEVER IS
FOUND IN THE LEGISLATIVE HISTORY OF THE LAW TO INDICATE ANY INTENTION
THAT IT WAS TO BE VIEWED AS AUTHORITY FOR THE ADVANCE MOVEMENT OF THE
HOUSEHOLD GOODS OF A MEMBER WITHOUT DEPENDENTS OR THAT IT CONSTITUTES
AUTHORITY FOR THE ADVANCE MOVEMENT OF HOUSEHOLD GOODS WHEN THE ADVANCE
MOVEMENT OF THE MEMBER'S DEPENDENTS HAS NOT BEEN AUTHORIZED AT
GOVERNMENT EXPENSE. THUS, IT IS OUR VIEW THAT UNDER THE STATUTE AND
IMPLEMENTING REGULATIONS THE MOVEMENT OF A MEMBER'S HOUSEHOLD GOODS IS
CONTINGENT ON AN AUTHORIZATION FOR THE TRANSPORTATION OF HIS DEPENDENTS.
SEE DECISION OF MARCH 22, 1965, B-156241, 44 COMP. GEN. ___, COPY
ENCLOSED.
IN THAT VIEW OF THE LAW THERE IS NO BASIS FOR AUTHORIZING THE
TRANSPORTATION OF HOUSEHOLD EFFECTS INDEPENDENTLY OF THE TRANSPORTATION
OF THE DEPENDENT. CONSEQUENTLY ANY MOVEMENT OF HOUSEHOLD EFFECTS AT
GOVERNMENT EXPENSE MUST ALSO INCLUDE AN AUTHORIZATION FOR TRANSPORTATION
OF THE DEPENDENT. A STIPULATION BY THE AIR FORCE SUCH AS APPEARS
CONTEMPLATED BY YOUR LETTER WOULD AFFORD NO AUTHORITY FOR THE
INDEPENDENT MOVEMENT OF THE HOUSEHOLD EFFECTS.
AS WE SAID IN OUR LETTER OF OCTOBER 13, 1965, TO YOU, THE RECORD
INDICATES THAT WHEN MRS. BARGER RETURNED TO THE UNITED STATES AT THE
TIME SHE SEPARATED FROM HER HUSBAND, SHE HAD NO INTENTION OF RETURNING
TO LIVE WITH HIM - AS EVIDENCED BY HER SUIT FOR A DIVORCE - AND, HENCE,
IT WOULD SEEM THAT SHE HAD ABANDONED HER STATUS AN AUTHORIZED DEPENDENT
AT HIS OVERSEAS STATION. HOWEVER, MRS. BARGER APPARENTLY WAS IN ENGLAND
AS A COMMAND SPONSORED DEPENDENT AND IT IS A MATTER FOR DETERMINATION BY
THE AIR FORCE WHETHER THEY WILL CONTINUE TO REGARD HER AS A "COMMAND
SPONSORED DEPENDENT" DESPITE HER DEPARTURE FROM ENGLAND. THEREFORE,
WHILE THE MATTER IS NOT FREE FROM DOUBT, IF THE AIR FORCE CONSIDERS THAT
MRS. BARGER'S STATUS AS A COMMAND SPONSORED DEPENDENT REMAINS UNCHANGED,
REGARDLESS OF WHERE SHE MAY BE PRESENTLY RESIDING, AND, ON THE BASIS
THAT THE INTEREST OF THE UNITED STATES REQUIRES SUCH ACTION IN THE
CIRCUMSTANCES OF THIS CASE, ISSUES ORDERS DIRECTING HER RETURN TO THE
UNITED STATES BECAUSE OF MARITAL DIFFICULTIES AND PROVIDING FOR THE
TRANSPORTATION OF THE HOUSEHOLD EFFECTS, THIS OFFICE WOULD NOT OBJECT TO
PAYMENT OF THE COSTS OF TRANSPORTING THE HOUSEHOLD EFFECTS UNDER SUCH
ORDERS TO THE EXTENT PROVIDED BY LAW AND REGULATIONS. SINCE, HOWEVER,
MRS. BARGER MUST BE VIEWED AS HAVING PERFORMED ANY TRAVEL WHICH WOULD BE
AUTHORIZED FOR HER UNDER THE ORDERS, PRIOR TO THE ORDERS AND AS IT SEEMS
CLEAR THAT HER TRAVEL TO THE UNITED STATES WAS NOT BASED UPON FIRM
ADVICE THAT SUCH ORDERS WOULD BE ISSUED, THE PRINCIPLES OF PARAGRAPHS
M7000-8 AND M7003-4 OF THE JOINT TRAVEL REGULATIONS WOULD PRECLUDE ANY
REIMBURSEMENT FOR THE COST OF HER TRAVEL.
IN THIS REGARD, IT MAY BE POINTED OUT THAT THE ENTITLEMENT TO
TRANSPORTATION OF DEPENDENTS AND HOUSEHOLD EFFECTS, IN OTHERWISE PROPER
CASES, IS THE RIGHT OF THE MEMBER RATHER THAN THE DEPENDENT AND
GENERALLY IS FOR AUTHORIZATION UPON THE APPLICATION OF THE MEMBER RATHER
THAN THE DEPENDENT. ANY EXCESS COSTS OF SUCH TRANSPORTATION OVER THE
COSTS PROVIDED BY LAW AND REGULATION MUST BE BORNE BY THE MEMBER.
B-157859, NOV. 15, 1965
TO VICE ADMIRAL JOSEPH M. LYLE, DIRECTOR, DEFENSE SUPPLY AGENCY:
REFERENCE IS MADE TO A LETTER DATED OCTOBER 13, 1965, WITH
ENCLOSURES, FROM R. F. S. HOMANN, ASSISTANT COUNSEL, WHICH SUBMITTED FOR
OUR CONSIDERATION A REQUEST BY THE WOLVERINE METAL COMPANY, 6500 EAST
ROBINWOOD AVENUE, DETROIT, MICHIGAN, TO RESCIND THE AWARD MADE TO THAT
CONCERN OF ITEMS 75 AND 76 OF INVITATION FOR BIDS NO. 21-S-65-114 BY
CONTRACT NO. DSA 21-S-6826, DATED JUNE 30, 1965, BECAUSE ITS BIDS
THEREON WERE SUBMITTED IN ERROR.
BY THE INVITATION THE DEFENSE LOGISTICS SERVICES CENTER OFFERED FOR
PURCHASE FROM THE GOVERNMENT NUMEROUS AMOUNTS OF SCRAP OF VARYING
DESCRIPTIONS. ITEMS 75 TO 76, AS WELL AS ITEM 74, WHICH WOLVERINE
STATES IS THE ONLY ITEM ON WHICH A BID WAS INTENDED, CONSISTED OF HIGH
TEMPERATURE NICKEL-BASED ALLOY SCRAP AND THE DESCRIPTION OF EACH
INCLUDED A GRADE OR CONTENT DESIGNATION.
THE TOTAL AMOUNT BID BY WOLVERINE METAL COMPANY ON THESE AND OTHER
ITEMS WAS $24,518.97 AND THE BIDDER DEPOSITED 20 PERCENT OF THAT, OR
$5,000, AS REQUIRED. THE TOTAL CONTRACT PRICE WAS $2,622.48 SO THE
OVERPAYMENT OF $2,377.52 WAS REFUNDED ON JULY 8, 1965.
ITEMS 75 AND 76 WERE AWARDED TO THE WOLVERINE METAL COMPANY ON JUNE
30, 1965, AT A UNIT PRICE OF $0.7575 PER POUND BUT BY LETTER DATED JULY
27, 1965, THE PURCHASER STATED THAT THE BIDS ON THOSE ITEMS WERE THE
RESULT OF AN ERROR MADE TO HIS SECRETARY. IN SUPPORT OF THIS ALLEGATION
THE BIDDER HAS SUBMITTED A NOTARIZED AFFIDAVIT BY HIS SECRETARY AND HIS
WORKSHEET SHOWING NOTATIONS OF A UNIT PRICE OF $0.7575 BESIDE ITEM 74
BUT NO NOTATION BESIDE ITEMS 75 AND 76.
ITEMS 65 AND 91 AWARDED UNDER THIS CONTRACT WERE REMOVED BY THE
PURCHASER ON JUNE 30, 1965, AND A NOTICE OF DEFAULT DATED AUGUST 2,
1965, WITH A CURE DATE OF AUGUST 17, 1965, PERTAINING TO ITEMS 75 AND 76
WAS SUSPENDED, AND THE GOVERNMENT RETAINED THE PURCHASE PRICE OF
$1,959.65 PENDING THE OUTCOME OF THIS CASE.
SINCE THE PURCHASER HAS CLAIMED THAT THE BID WAS ERRONEOUSLY PREPARED
AND SUBMITTED BY HIM THE ONLY QUESTION FOR OUR CONSIDERATION IS WHETHER,
IN THESE CIRCUMSTANCES, THE CONTRACTING OFFICER HAD, OR SHOULD HAVE HAD,
KNOWLEDGE OF THE MISTAKE PRIOR TO AWARD.
THE GENERAL PRINCIPLES APPLICABLE TO THIS CASE WERE SET OUT IN
SALIGMAN V. UNITED STATES, 65 F.SUPP. 505, 507, WHERE IT WAS HELD THAT
IF THERE WAS A UNILATERAL MISTAKE IN BID BY THE PURCHASER AND HE WAS
AWARDED THE CONTRACT HE WOULD BE BOUND BY IT AND MUST BEAR THE
CONSEQUENCES--- UNLESS THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE
KNOWN, OF THE MISTAKE. IN THAT CASE THE CONTRACT IS VOIDABLE AT THE
PURCHASER'S OPTION. SEE 5 WILLISTON, CONTRACTS SEC. 1598; KEMP V.
UNITED STATES, 38 F.SUPP. 568; WENDER PRESSES, INC. V. UNITED STATES,
343 F.2D 961.
AS THIS WAS A SALE OF SURPLUS METALS, KNOWLEDGE OF THE BID MISTAKE
CANNOT BE IMPUTED TO THE CONTRACTING OFFICER MERELY BY COMPARING THE
DIFFERENT BIDS AND NOTING THEIR RELATION TO EACH OTHER BECAUSE
DIFFERENCES IN THE PRICES BID FOR SURPLUS PROPERTY DO NOT HAVE THE SAME
IMPLICATION AS WOULD LIKE DIFFERENCES IN PRICES QUOTED ON NEW EQUIPMENT,
SUPPLIES, ETC., TO BE FURNISHED. SEE UNITED STATES V. SABIN METAL
CORP., 151 F.SUPP. 683, AFFIRMED 253 F.2D 956; 16 COMP. GEN. 596; 17
ID. 388; ID. 601, 603. AND THE CONTRACTING OFFICER HAD NO ACTUAL
KNOWLEDGE OF THE MISTAKE PRIOR TO AWARD.
IN SALES INVOLVING SURPLUS PROPERTY THE GOVERNMENT IS INTERESTED ONLY
IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL AND IN ACHIEVING
THIS AND IT IS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT
OF THE BIDDERS, OR TO EXAMINE EVERY BID FOR POSSIBLE ERROR. UNITED
STATES V. SABIN METAL CORP., SUPRA. ACCORDINGLY, THE FACT THAT A
METALLURGY EXPERT SURMISED THAT BIDS LIKE WOLVERINE'S WOULD BE BASED ON
A MISTAKE HAS NO BEARING ON THE ULTIMATE DECISION, ESPECIALLY SINCE THE
STATEMENT WAS ISSUED THREE MONTHS AFTER THE BID OPENING DATE.
AS THE RESPONSIBILITY FOR PREPARATION OF THE BID IS ENTIRELY THAT OF
THE BIDDER AND THE EVIDENCE SHOWS NO FRAUD, DURESS, ACCIDENT OR SUCH
MISTAKE BY THE GOVERNMENT AS WOULD JUSTIFY A RESCISSION OF THE CONTRACT
IT IS THE DECISION OF OUR OFFICE THAT THE CONTRACT IS VALID AND
ENFORCEABLE.
B-157886, NOV. 12, 1965
TO THE SECRETARY OF THE INTERIOR:
BY LETTER DATED OCTOBER 19, 1965, THE DEPUTY ASSISTANT SECRETARY OF
THE INTERIOR HAS REQUESTED OUR DECISION REGARDING THE DISPOSITION OF THE
BALANCE OF $9,102 DUE UNDER CONTRACT NO. 14-20-015Q-760, DATED MAY 22,
1964. THE CONTRACT, AWARDED BY THE BUREAU OF INDIAN AFFAIRS (THE
BUREAU) TO FIDELITY BUILDERS, INCORPORATED, PHOENIX, ARIZONA, FOR THE
CONSTRUCTION OF A HEALTH STATION AT LAVEEN, ARIZONA, WAS COMPLETED ON
FEBRUARY 18, 1965. CLAIMS FOR THE FINAL PAYMENT HAVE BEEN PRESENTED BY
THE FIRST NATIONAL BANK OF ARIZONA, PHOENIX, AS ASSIGNEE, AND BY THE
DISTRICT DIRECTOR, INTERNAL REVENUE SERVICE (IRS), PHOENIX.
PARAGRAPH 8 (A), GENERAL PROVISIONS (CONSTRUCTION CONTRACT), STANDARD
FORM 23-A, INCORPORATED IN THE CONTRACT, READS AS FOLLOWS:
"8. ASSIGNMENT OF CLAIMS
(A) PURSUANT TO THE PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT OF
1940, AS AMENDED (31 U.S.C. 203, 41 U.S.C. 15), IF THIS CONTRACT
PROVIDES FOR PAYMENTS AGGREGATING $1,000 OR MORE, CLAIMS FOR MONEYS DUE
OR TO BECOME DUE THE CONTRACTOR FROM THE GOVERNMENT UNDER THIS CONTRACT
MAY BE ASSIGNED TO A BANK, TRUST COMPANY, OR OTHER FINANCING
INSTITUTION, INCLUDING ANY FEDERAL LENDING AGENCY, AND MAY THEREAFTER BE
FURTHER ASSIGNED AND REASSIGNED TO ANY SUCH INSTITUTION. ANY SUCH
ASSIGNMENT OR REASSIGNMENT SHALL COVER ALL AMOUNTS PAYABLE UNDER THIS
CONTRACT AND NOT ALREADY PAID, AND SHALL NOT BE MADE TO MORE THAN ONE
PARTY, EXCEPT THAT ANY SUCH ASSIGNMENT OR REASSIGNMENT MAY BE MADE TO
ONE PARTY AS AGENT OR TRUSTEE FOR TWO OR MORE PARTIES PARTICIPATING IN
SUCH FINANCING. UNLESS OTHERWISE PROVIDED IN THIS CONTRACT, PAYMENTS TO
AN ASSIGNEE OF ANY MONEYS DUE OR TO BECOME DUE UNDER THIS CONTRACT SHALL
NOT, TO THE EXTENT PROVIDED IN SAID ACT, AS AMENDED, BE SUBJECT TO
REDUCTION OR SETOFF. (THE PRECEDING SENTENCE APPLIES ONLY IF THIS
CONTRACT IS MADE IN TIME OF WAR OR NATIONAL EMERGENCY AS DEFINED IN SAID
ACT AND IS WITH THE DEPARTMENT OF DEFENSE, THE GENERAL SERVICES
ADMINISTRATION, THE ATOMIC ENERGY COMMISSION, THE NATIONAL AERONAUTICS
AND SPACE ADMINISTRATION, THE FEDERAL AVIATION AGENCY, OR ANY OTHER
DEPARTMENT OR AGENCY OF THE UNITED STATES DESIGNATED BY THE PRESIDENT
PURSUANT TO CLAUSE 4 OF THE PROVISO OF SECTION 1 OF THE ASSIGNMENT OF
CLAIMS ACT OF 1940, AS AMENDED BY THE ACT OF MAY 15, 1951, 65 STAT.
41.)"
ON FEBRUARY 17, THE BUREAU RECEIVED A NOTICE OF ASSIGNMENT SIGNED BY
BOTH THE CONTRACTOR AND THE ASSIGNEE TOGETHER WITH A COPY OF AN
ASSIGNMENT EXECUTED BY THE CONTRACTOR ASSIGNING TO THE BANK ALL MONEYS
DUE OR TO BECOME DUE UNDER THE CONTRACT IN ACCORDANCE WITH THE
ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED. ON FEBRUARY 23, THE
CONTRACTING OFFICER SIGNED AN ACKNOWLEDGMENT OF THE NOTICE AND
ASSIGNMENT.
ON MARCH 18, IRS SERVED ON THE CONTRACTING OFFICER A NOTICE OF LEVY
DATED MARCH 15, ISSUED BY THE DISTRICT DIRECTOR, PHOENIX, ATTACHING THE
MONEYS DUE UNDER THE CONTRACT PURSUANT TO 26 U.S.C. 6331 (A), IN
SATISFACTION OF THE CONTRACTOR'S INDEBTEDNESS TO THE UNITED STATES IN
THE TOTAL AMOUNT OF $17,321.97, REPRESENTING EMPLOYEES WITHHOLDING TAXES
AND INSURANCE CONTRIBUTIONS FOR THE SECOND, THIRD, AND FOURTH QUARTERS
OF THE CALENDAR YEAR 1964 PLUS INTEREST. ON MARCH 25, THE TAX LIEN WAS
PUBLICLY RECORDED WITH THE PROPER ARIZONA STATE OFFICIAL PURSUANT TO 26
U.S.C. 6323. THE TAX DEBT WAS SUBSEQUENTLY REDUCED TO $8,294.83, THE
AMOUNT CLAIMED AS OF AUGUST 23 BY IRS.
IT IS THE POSITION OF THE ASSIGNEE THAT IT IS A "MORTGAGEE" AS
CONTEMPLATED BY 26 U.S.C. 6323 (A), MAKING FEDERAL TAX LIENS INVALID AS
AGAINST MORTGAGES AND CERTAIN OTHER PARTIES UNTIL PUBLICLY RECORDED,
AND, THEREFORE, THE GOVERNMENT NOT HAVING PUBLICLY RECORDED ITS LIEN
UNTIL AFTER THE ASSIGNMENT HAD BEEN EFFECTED AND PROPER NOTICE HAD BEEN
GIVEN THE CONTRACTING OFFICER, THAT THE ASSIGNEE'S CLAIM IS SUPERIOR TO
THE IRS LIEN.
THE ASSIGNEE'S ATTORNEYS CITE SEVERAL COURT CASES CONSTRUING THE
FEDERAL TAX LIEN LAW IN 26 U.S.C. 6321-6323 AS APPLIED IN SITUATIONS IN
WHICH THE UNITED STATES HAS ONLY ONE STATUS, THAT OF A CREDITOR, AND THE
AMOUNTS CLAIMED ARE DUE FROM A NON-GOVERNMENT SOURCE. HOWEVER, SINCE
THE GOVERNMENT HAS IN THE INSTANT CASE THE DUAL STATUS OF
DEBTOR-CREDITOR, THE AMOUNTS CLAIMED BEING DUE FROM THE GOVERNMENT, SUCH
COURT CASES ARE NOT DETERMINATIVE OF THE QUESTION PRESENT IN THE CASE.
THE DEPARTMENT OF THE INTERIOR IS NOT ONE OF THE AGENCIES NAMED IN
PARAGRAPH 8/B) OF THE GENERAL PROVISIONS OF THE CONTRACT QUOTED ABOVE TO
WHICH THE "NO SET-OFF" PROVISIONS OF THE ASSIGNMENT OF CLAIMS ACT OF
1940, AS AMENDED, APPLY, NOR HAS IT BEEN BROUGHT WITHIN THE PURVIEW OF
SUCH PROVISIONS THROUGH DESIGNATION BY THE PRESIDENT. THEREFORE,
DETERMINING THE RIGHTS OF THE ASSIGNEE AND THE GOVERNMENT TO THE AMOUNT
DUE UNDER THE CONTRACT THERE MUST BE CONSIDERED, IN ADDITION TO WHATEVER
PROTECTION IS ACCORDED THE GOVERNMENT BY THE TAX LIEN PROVISIONS IN 26
U.S.C. 6321-6323, THE COMMON-LAW RIGHT OF THE GOVERNMENT AS A CREDITOR
TO SET-OFF, FROM AMOUNTS OWED BY IT TO A DEBTOR, ANY DEBTS DUE FROM SUCH
DEBTOR TO THE GOVERNMENT.
UNDER THE FEDERAL TAX REGULATIONS PUBLISHED IN TITLE 26 OF THE CODE
OF FEDERAL REGULATIONS, THE TAX AND INSURANCE CONTRIBUTIONS IN QUESTION
WERE REQUIRED TO BE COLLECTED AS AND WHEN THE CONTRACTOR PAID HIS
EMPLOYEES THEIR WAGES (SECTIONS 31.3102-1 (A) AND 31.3402 (A/-1 (B) );
THE CONTRACTOR WAS LIABLE WHETHER OR NOT HE MADE THE DEDUCTIONS
(SECTIONS 31-3102-1 (C) AND 1.3403-1); AND THE TAXES AND INSURANCE
CONTRIBUTIONS WITHHELD BY THE CONTRACTOR-EMPLOYER CONSTITUTED SPECIAL
FUNDS IN TRUST FOR THE UNITED STATES (SECTIONS 31.3102-1 (C) AND 31.3402
(A/-1 (F) ). PURSUANT TO SUCH REGULATIONS, THE DEBT WAS DUE THE UNITED
STATES BEFORE FEBRUARY 17, 1965, THE DATE THE UNITED STATES RECEIVED
PROPER NOTICE OF THE ASSIGNMENT, AND, THEREFORE, WAS IN EXISTENCE BEFORE
THE ASSIGNMENT WAS EFFECTIVE. FURTHERMORE, THE FACT THAT THE ASSIGNEE
WAS NOT ON NOTICE OF THE DEBT WHEN IT ACCEPTED THE ASSIGNMENT DOES NOT
DEFEAT THE GOVERNMENT'S COMMON-LAW RIGHT OF SET-OFF. 37 COMP. GEN. 808;
SOUTH SIDE BANK AND TRUST CO. V. UNITED STATES, 221 F.2D 13; UNITED
STATES V. TRINITY UNIVERSAL INSURANCE CO., 249 F.2D 350.
IN THE CIRCUMSTANCES, WE MUST CONCLUDE THAT, NOTWITHSTANDING THE TAX
LIENS IN QUESTION DID NOT ARISE UNDER 26 U.S.C. 6322 UNTIL THE
ASSESSMENTS WERE MADE AND THAT THE PUBLIC RECORDING REQUIRED BY 26
U.S.C. 6323 (A) FOR THE ENFORCEMENT OF SUCH LIENS AGAINST MORTGAGEES AND
CERTAIN OTHER PARTIES IN INTEREST WAS MADE AFTER THE ASSIGNMENT WAS
EFFECTIVE, THE GOVERNMENT IS ENTITLED TO EXERCISE ITS COMMON-LAW RIGHT
TO SET-OFF, FROM THE AMOUNTS DUE UNDER THE CONTRACT IN QUESTION, THE
CONTRACTOR'S DEBT TO THE UNITED STATES. ACCORDINGLY, THERE SHOULD BE
SET-OFF FROM THE BALANCE DUE UNDER THE CONTRACT THE AMOUNT CURRENTLY
STATED BY IRS TO BE DUE THE UNITED STATES ON ACCOUNT
B-157918, NOV. 12, 1965
TO THE SECRETARY OF DEFENSE:
REFERENCE IS MADE TO LETTER OF OCTOBER 22, 1965, FROM THE ASSISTANT
SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO WHETHER
THE SECRETARIES OF THE MILITARY DEPARTMENTS MAY PROMULGATE REGULATIONS
REQUIRING THAT A DEDUCTION BE MADE FROM THE SUBSISTENCE ALLOWANCE
AUTHORIZED TO BE PAID TO MEMBERS OF THE RESERVE OFFICERS' TRAINING CORPS
BY SECTION 209 OF TITLE 37, U.S. CODE, AS AMENDED BY SECTION 202 (2) OF
THE RESERVE OFFICERS' TRAINING CORPS VITALIZATION ACT OF 1964, PUB.L.
88-647, APPROVED OCTOBER 13, 1964, 78 STAT. 1070, FOR EACH HOUR OF
UNAUTHORIZED ABSENCE FROM THE SCHEDULED TRAINING.
A DISCUSSION PERTAINING TO THE QUESTION IS SET FORTH IN COMMITTEE
ACTION NO. 358 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE
COMMITTEE. THE COMMITTEE ACTION POINTS OUT THAT PRIOR TO THE ENACTMENT
OF THE 1964 LAW, A MEMBER OF THE ARMY AND AIR FORCE SENIOR RESERVE
OFFICERS' TRAINING CORPS RECEIVING "ADVANCED TRAINING" (IN THE THIRD AND
FOURTH YEARS OF COLLEGE) WAS "ENTITLED TO AN ALLOWANCE FOR SUBSISTENCE
AT SUCH RATE, NOT EXCEEDING THE COST OF THE GARRISON RATION * * * AS MAY
BE FIXED BY THE SECRETARY * * *; " AND THAT UNDER THAT AUTHORITY THE
ARMY AND AIR FORCE PROVIDED BY REGULATION FOR THE DEDUCTION OF AN AMOUNT
EQUIVALENT TO 2 DAYS' ALLOWANCE FROM A STUDENT'S NEXT PAYMENT OF
COMMUTATION OF SUBSISTENCE FOR EACH UNAUTHORIZED ABSENCE FROM AN HOUR OF
ROTC INSTRUCTION, BUT THAT THERE IS NO REFERENCE IN THE 1964 LAW TO THE
SECRETARY'S DISCRETION IN FIXING SUBSISTENCE RATES.
SECTION 202 (2) OF THE 1964 LAW AMENDS SECTION 209 OF TITLE 37, U.S.
CODE, TO PROVIDE THAT A MEMBER OF THE SENIOR RESERVE OFFICERS' TRAINING
CORPS IS ENTITLED TO SUBSISTENCE ALLOWANCE AT THE ,RATE" OF NOT LESS
THAN $40 PER MONTH OR MORE THAN $50 PER MONTH WHILE UNDERGOING ADVANCED
TRAINING. NOTHING IN THE STATUTE MAKES THAT AN INDIVISIBLE MONTHLY SUM
OF MONEY, BUT RATHER THE STATUTE PRESCRIBES THE RANGE IN WHICH THE TOTAL
AMOUNT OF THE SUBSISTENCE FOR A MONTH MAY BE.
THE SUBSISTENCE ALLOWANCE IS PAID IN CONSIDERATION FOR THE
PERFORMANCE OF DUTIES IN THE ADVANCED TRAINING, AS PRESCRIBED BY THE
SECRETARY CONCERNED, BY MEMBERS OF THE SENIOR ROTC ADVANCED TRAINING
PROGRAM. WHERE A MEMBER FAILS TO PERFORM HIS DUTIES BY BEING ABSENT
FROM ADVANCED TRAINING CLASSES OR EXERCISES, WE PERCEIVE NO OBJECTION TO
WITHHOLDING AN APPROPRIATE PORTION OF THE SUBSISTENCE ALLOWANCE BECAUSE
OF SUCH FAILURE. WE THINK THAT IT IS PROPER TO ESTABLISH BY REGULATION
THAT A DEDUCTION SHOULD BE MADE FROM THE SUBSISTENCE ALLOWANCE FOR EACH
HOUR OF UNAUTHORIZED ABSENCE FROM SCHEDULED TRAINING. SEE A-48651, MAY
6, 1933.
B-156734, NOV. 10, 1965
TO APPLIED LASERS, INCORPORATED:
REFERENCE IS MADE TO YOUR LETTER OF MAY 7, 1965, PROTESTING THE AWARD
OF REQUEST FOR PROPOSALS NO. (F) AMC (R) 29-040-65-877 TO THE KORAD
CORPORATION BY CONTRACT NO. DA-29-040-AMC-1326 (R); YOU ALLEGE THAT
YOUR BID WAS THE LOWEST BY $2,200, AND THAT THE EQUIPMENT OFFERED BY YOU
MET THE SPECIFIED REQUIREMENTS.
THE NEED FOR A "Q" SWITCHED LASER SYSTEM WAS FIRST FORMALLY
ADVERTISED FOR UNDER INVITATION FOR BIDS NO. AMC (R) 20-040-65-107,
ISSUED ON DECEMBER 23, 1964, BUT A TECHNICAL EVALUATION DETERMINED
THAT NONE OF THE BIDS RECEIVED WAS RESPONSIVE. AS THE NEED FOR THE
LASER SYSTEM WAS URGENT THE CONTRACTING OFFICER ISSUED THE RFP, UNDER
THE NEGOTIATION AUTHORITY OF ASPR 3-210.2, ON MARCH 9, 1965, COVERING
THREE ITEMS, INCLUDING THE "Q" SWITCHED LASER SYSTEM AS ITEM NO. 3.
IN ARRIVING AT THE REQUIREMENT AND DRAFTING THE PURCHASE DESCRIPTION
FOR ITEM NO. 3 OF THE REQUEST THE GOVERNMENT FIRST DETERMINED EXACTLY
WHAT IT WANTED. ONE OF THE SPECIFIED REQUIREMENTS WAS THAT TWO ENERGY
STORAGE UNITS WOULD BE FURNISHED BY THE CONTRACTOR ALONG WITH THE LASER,
NOT AS SPARES, BUT TO BE ADDED TO THE MACHINE TO INCREASE ITS CAPACITY
SO THAT DIFFERENT TYPES OF LASER HEADS COULD BE USED, THUS PROVIDING
GREATER VERSATILITY IN THE EXPERIMENTAL AND DEVELOPMENTAL WORK FOR WHICH
IT WAS DESIGNED. THIS REQUIREMENT WAS IMPORTANT BECAUSE THE "Q"
SWITCHED LASER SYSTEM DOES NOT ALLOW FOR THE ADDITION OF SPARE ENERGY
STORAGE UNITS.
FIVE OF THE EIGHT PROPOSALS RECEIVED SUBMITTED OFFERS ON ITEM NO. 3.
THE LOWEST BID WAS DETERMINED NOT TO BE TECHNICALLY ACCEPTABLE AND THE
NEXT LOW BID, BY YOUR FIRM, WAS LIKEWISE FOUND TO BE TECHNICALLY
UNACCEPTABLE SINCE IT DID NOT INCLUDE TWO EXTRA ENERGY STORAGE UNITS.
THE TECHNICAL REPRESENTATIVE AND THE CONTRACT SPECIALIST ASSIGNED TO THE
PROCUREMENT TELEPHONED YOUR FIRM AND REQUESTED MORE TECHNICAL LITERATURE
ON THE OFFERED EQUIPMENT. BY LETTER DATED APRIL 12, 1965, YOU CLARIFIED
SOME QUESTIONS CONCERNING THE POWER SUPPLY BUT NOT THE ENERGY STORAGE
UNITS. BECAUSE APPLIED LASERS, INCORPORATED, FAILED TO SUBMIT
SUFFICIENT INFORMATION WITH ITS PROPOSAL TO ENABLE THE GOVERNMENT TO
MAKE A COMPLETE TECHNICAL EVALUATION, AND THEN FAILED TO SUPPLY
ADDITIONAL INFORMATION WHEN SPECIFICALLY ASKED, THE PROPOSAL WAS
CLASSIFIED BY THE CONTRACTING OFFICER AS NOT TECHNICALLY ACCEPTABLE AND
FURTHER ACTION WAS DEEMED UNNECESSARY.
A SECOND COMPLETE TECHNICAL EVALUATION COVERING THE SAME PROPOSAL WAS
CONDUCTED AT THE REQUEST OF THE CONTRACTING OFFICER, AND THAT REPORT
DATED JUNE 17, 1965, CONFIRMED THE EARLIER DETERMINATION THAT IT WAS
TECHNICALLY UNACCEPTABLE. IT FURTHER STATED THAT THE PRICE DIFFERENCE
CLAIM OF $2,200 WAS MISLEADING BECAUSE HAD APPLIED LASERS, INCORPORATED,
OFFERED TWO EXTRA ENERGY STORAGE UNITS WITH ITS PROPOSAL THE PRICE WOULD
HAVE BEEN ALMOST THE SAME AS THAT OF THE SUCCESSFUL PROPOSER.
IT IS THE ESTABLISHED POSITION OF THIS OFFICE THAT IN A NEGOTIATED
PROCUREMENT THE CONTRACTING OFFICER IS UNDER A DUTY TO CONDUCT THE
NEGOTIATION TO THE BEST ADVANTAGE OF THE GOVERNMENT. SEE 38 COMP. GEN.
861; 40 ID. 508. HOWEVER, THE FINAL SELECTION OF A CONTRACTOR IS
LARGELY A MATTER OF JUDGMENT AND AN ADMINISTRATIVE DETERMINATION OF THE
MATTER SHOULD NOT BE DISTURBED IN THE ABSENCE OF BAD FAITH OR ABUSE OF
DISCRETION. SEE B-149330 AND B-149344.
ACCORDINGLY, AS THE PROPOSAL BY APPLIED LASERS, INCORPORATED, WAS
ADMINISTRATIVELY DETERMINED TO BE TECHNICALLY UNACCEPTABLE AND THERE IS
NO EVIDENCE OF BAD FAITH OR ABUSE OF DISCRETION THIS OFFICE CONCURS WITH
THE ADMINISTRATIVE DECISION THAT THE PROTEST BE REJECTED AND THE
CONTRACT NOT BE DISTURBED.
B-157115, NOV. 10, 1965
TO MR. CECIL F. JOHNSON:
REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 1, 1965, CONCERNING YOUR
CLAIM FOR ACCRUED PAY DUE YOU AS OF DECEMBER 11, 1942, THE DATE OF YOUR
DISCHARGE FROM THE ARMY. YOU SAY THAT YOU WANT 2 PERCENT INTEREST FOR
20 YEARS ON THE AMOUNT DUE YOU.
YOU ARE ADVISED THAT WE ARE INSTRUCTING THE CLAIMS DIVISION OF OUR
OFFICE TO STATE A SETTLEMENT IN YOUR FAVOR FOR $213.73, THE AMOUNT DUE
YOU WHEN YOU WERE DISCHARGED FROM THE ARMY. THERE IS, HOWEVER, NO
AUTHORITY FOR THE PAYMENT OF INTEREST IN YOUR CASE, THERE BEING FOR
APPLICATION THE LONG-ESTABLISHED RULE THAT INTERESTS ON CLAIMS AGAINST
THE UNITED STATES CANNOT BE RECOVERED IN THE ABSENCE OF AN EXPRESS
PROVISION TO THE CONTRARY IN THE PERTINENT LAW OR CONTRACT. UNITED
STATES V. THAYER-WEST POINT HOTEL CO., 329 U.S. 585, 588 (1947).
B-157418, NOV. 10, 1965
TO ROTATING COMPONENTS, INC:
FURTHER REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 4, 1965, WITH
ENCLOSURES, PROTESTING THE CANCELLATION OF INVITATION FOR BIDS NO. AMC
(A) 36-038-65-1073 (WKI) (IFB 1073) AND THE READVERTISING OF THE SAME
ITEM ON INVITATION NO AMC (A) 36-038-65-1218 (WKI) BY THE FRANKFORD
ARSENAL.
UNDER INVITATION FOR BIDS NO. AMC (A) 36-038-65-1073 (WKI), ISSUED
MAY 7, 1965, BIDS WERE SOLICITED FOR A TOTAL ESTIMATED QUANTITY OF 1,500
ALTERNATING CURRENT MOTORS, DRAWING NO. D7599786. THIS PROCUREMENT WAS
A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS.
BIDS WERE OPENED ON JUNE 7, 1965, AND THE FOLLOWING BIDS WERE
RECEIVED FROM SMALL BUSINESS CONCERNS:
CHART
BIDDER UNIT PRICE
GLOBE INDUSTRIES, INC. $25.00
SKURKA-LANGDON ENGINEERING CO. 43.95
ROTATING COMPONENTS, INC. 23.45
IN ADDITION, THE FOLLOWING BIDS WERE RECEIVED:
VARO, INC., ELECTROKINETICS DIVISION
(EMPLOYED MORE THAN 500 PERSONNEL) $21.00
EASTERN AIR DEVICES, INC. (LARGE
BUSINESS) 19.45
ON JUNE 8, 1965, THE CONTRACTING OFFICER DETERMINED, PURSUANT TO
ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-706.3, THAT THE PRICES
OFFERED BY ELIGIBLE SMALL BUSINESS CONCERNS WERE UNREASONABLE AND,
THEREFORE, THAT IFB 1073 SHOULD BE CANCELED AND THE REQUIREMENT FOR THE
MOTORS READVERTISED WITHOUT RESTRICTION. THIS DETERMINATION WAS BASED
UPON THE FOLLOWING FACTORS:
A. UNDER A CURRENT CONTRACT, NO. DA-36-038-AMC-2413 (W) WITH YOUR
COMPANY, DATED MARCH 5, 1965, THE UNIT PRICE WAS $21.50 FOR 1,500
MAXIMUM ESTIMATED QUANTITY OF THE SAME MOTORS. THIS CONTRACT WAS
AWARDED PURSUANT TO COMPETITIVE SEALED BIDDING RESTRICTED TO SMALL
BUSINESS CONCERNS.
B. THE UNSOLICITED OFFER BY EASTERN AIR DEVICES, INC., OF $19.45
EACH.
ON JUNE 11, 1965, INVITATION NO. AMC (A) 36-038-65-1218 (WKI) WAS
ISSUED FOR THE REQUIRED MOTORS WITHOUT THE SMALL BUSINESS SET-ASIDE
LIMITATION. BIDS WERE OPENED ON JULY 1, 1965, AND THIS TIME SIX BIDS
WERE RECEIVED AS FOLLOWS:
CHART
BIDDER UNIT PRICE
EASTERN AIR DEVICES, INC. $18.74
LAMB ELECTRIC, A DIVISION OF AMETEK, INC. 19.40
VARO, INC., ELECTROKINETICS DIVISION 21.00
IMC MAGNETIC CORP. 22.75
ROTATING COMPONENTS, INC. 23.45
GLOBE INDUSTRIES, INC. 25.00
ON JULY 28, 1965, AWARD UNDER THIS INVITATION WAS MADE TO THE LOW
BIDDER--- EASTERN AIR DEVICES, INC., AT THE UNIT PRICE OF $18.74--- AS
CONTRACT NO. DA-36-038-AMC-2999W.
YOU PROTEST AGAINST THE CANCELLATION OF THE ORIGINAL INVITATION,
STATING THAT:
"* * * IFB 1073 WAS A 100 PERCENT SMALL BUSINESS SET-ASIDE FOR
COMPANIES UNDER 500 EMPLOYEES. ON PAGE 2 OF THIS IFB, UNDER NOTICE OF
TOTAL SMALL BUSINESS SET-ASIDE, THE LAST SENTENCE SPECIFICALLY
STATES,"BIDS OR PROPOSALS RECEIVED FROM FIRMS WHICH ARE NOT SMALL
BUSINESS CONCERNS SHALL BE CONSIDERED NONRESPONSIVE AND SHALL BE
REJECTED.' WE WERE THE LOWEST RESPONSIBLE BIDDER. THE AWARD SHOULD HAVE
BEEN PLACED WITH US. HOWEVER, THERE WERE TWO BIDS WHICH WERE LOWER THAN
OURS PLACED BY EASTERN AIR DEVICES AND VARO. BOTH OF THESE COMPANIES
ARE LARGE BUSINESS. THEIR BIDS WERE ACCEPTED AND CONSIDERED AND DUE TO
THE FACT THAT THESE TWO BIDDERS HAD QUOTED LOWER THAN WE, THE IFB WAS
CANCELLED. THERE IS NO QUESTION IN OUR MINDS, THAT THIS ACTION WAS
CONTRARY TO THE SMALL BUSINESS REGULATIONS.'
ASPR 1-706.3 (A) PROVIDES FOR THE WITHDRAWAL OF A SMALL BUSINESS
SET-ASIDE WHEN IT IS CONSIDERED THAT AWARD UNDER THE SET-ASIDE "WOULD BE
DETRIMENTAL TO THE PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE
PRICE); " AND WE HAVE RECOGNIZED THAT THE DETERMINATION TO WITHDRAW A
SMALL BUSINESS SET-ASIDE BECAUSE OF UNREASONABLE PRICE IS A MATTER WHICH
RESTS WITHIN ADMINISTRATIVE DISCRETION, AND WHERE IT IS SHOWN THAT THE
PURPOSE OF SUCH ACTION IS TO OBTAIN FOR THE GOVERNMENT THE ADVANTAGE OF
MORE COMPETITIVE AND REALISTIC BIDDING AS DETERMINED BY THE GOVERNMENT'S
DULY CONSTITUTED AGENTS, WE WILL NOT OBJECT TO SUCH ACTION. B-149889,
NOVEMBER 2, 1962; B-145376, AUGUST 11, 1961; SEE 37 COMP. GEN. 147.
YOUR PROTEST, IN EFFECT, IS BASED PRIMARILY UPON THE CONTENTION THAT
THE BIDS OF OTHER THAN SMALL BUSINESS CONCERNS SHOULD NOT HAVE BEEN
RECEIVED AND THAT THE SOLE PURPOSE OF SUCH BIDS WAS TO UPSET THE
INVITATION AND INDUCE THE GOVERNMENT TO CANCEL IT, AND THAT WITH THE
PUBLICATION OF ALL OTHER BIDDERS' PRICES, THE LARGE BUSINESS CONCERNS
COULD RAISE THEIR PRICES AND STILL GET AN AWARD. IN OTHER WORDS, YOU
CONTEND THAT THE BIDS OF LARGE BUSINESS WERE NOT FIRM IN THE FIRST
INSTANCE. YOU STATE YOUR BELIEF THAT IT WAS THE INTENTION OF THE SMALL
BUSINESS ACT TO PROTECT SMALL COMPANIES AGAINST THIS TYPE OF BIDDING.
WHILE THERE IS NO DOUBT THAT THE PROVISIONS OF THE SMALL BUSINESS ACT
AUTHORIZE THE AWARD OF CONTRACTS TO SMALL BUSINESS CONCERNS AT PRICES
WHICH MAY BE HIGHER THAN THOSE OBTAINABLE BY UNRESTRICTED COMPETITION,
WE ARE AWARE OF NO VALID BASIS UPON WHICH IT MAY BE CONCLUDED THAT THIS
ACT WAS INTENDED TO REQUIRE THE AWARD OF CONTRACTS TO SMALL BUSINESS
CONCERNS AT PRICES CONSIDERED UNREASONABLE BY THE CONTRACTING AGENCY, OR
THAT THE CONTRACTING AGENCY WOULD BE PROHIBITED FROM WITHDRAWING A
SET-ASIDE DETERMINATION WHERE THE BIDS SUBMITTED BY SMALL BUSINESS
CONCERNS WERE CONSIDERED UNREASONABLE.
UNDER THE STATED TERMS OF THE INVITATION BIDS FROM LARGE BUSINESS
CONCERNS WERE TO BE CONSIDERED AS NONRESPONSIVE AND WERE TO BE REJECTED
AND NOT CONSIDERED FOR AWARD. SUCH BIDS, WHILE NONRESPONSIVE, ARE
REGARDED AS COURTESY BIDS AND, AS SUCH, APPLICABLE REGULATIONS HAVE, IN
THE PAST, AFFIRMATIVELY PROVIDED FOR THEIR RECORDATION FOR USE IN
DETERMINING THE PROPRIETY OF EXECUTING DETERMINATIONS IN CONNECTION WITH
FUTURE PROCUREMENT OF THE SAME OR SIMILAR ITEMS. IN THE PRESENT CASE,
WHETHER OR NOT EASTERN AIR DEVICES' BID WAS PROPERLY FOR CONSIDERATION
IN DETERMINING TO WITHDRAW THE SET-ASIDE IS NOT CONTROLLING SINCE THERE
WAS A VALID REASON OTHERWISE FOR THE CANCELLATION, NAMELY, THE
SUBSTANTIAL DIFFERENCE BETWEEN THE LOW RESPONSIVE BID AND THE PRICE PAID
FOR THE MATERIAL UNDER A PRIOR PROCUREMENT. 37 COMP. GEN. 147.
IN ANY EVENT, IT IS NOTED THAT UPON RESOLICITATION YOUR BID WAS THE
FIFTH HIGHEST OUT OF SIX RECEIVED AND EASTERN DEVICES' BID WAS LOWER
THAN THAT SUBMITTED UNDER THE PREVIOUS INVITATION. THUS, THERE WAS A
SOUND BASIS FOR ASSUMING THAT RESOLICITATION WOULD RESULT IN THE
SUBMISSION OF BID PRICES SUBSTANTIALLY LOWER THAN THOSE RECEIVED UNDER
THE CANCELED INVITATION. IT WOULD APPEAR THAT THE DECISION TO REJECT
ALL BIDS AND READVERTISE THE PROCUREMENT WAS JUSTIFIED AS BEING IN THE
BEST INTERESTS OF THE GOVERNMENT.
ACCORDINGLY, WE FIND NO LEGAL BASIS TO OBJECT TO THE AWARD OF A
CONTRACT UNDER INVITATION AMC (A) 36-038-65-1218 (WKI) TO EASTERN
DEVICES, INC., AND YOUR PROTEST IS DENIED.
B-157565, NOV. 10, 1965
TO INGERSOLL-RAND COMPANY:
YOUR TELEGRAM DATED AUGUST 26, 1965, AND LETTER DATED AUGUST 30,
1965, PROTESTED THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO.
DSA-799-66-0077 TO ANY OTHER BIDDER. THE INVITATION WAS ISSUED BY THE
DEFENSE CONSTRUCTION SUPPLY CENTER ON JULY 16, 1965, AND SOLICITED
PRICES FOR THE PRODUCTION OF 42 PNEUMATIC ROCK DRILLS, WEIGHING 45
POUNDS EACH, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-D-52121. THE
INVITATION WAS AMENDED TWICE TO INCREASE THE QUANTITY AND TO MAKE
CERTAIN PROVISIONS APPLICABLE TO THE INCREASED QUANTITY.
IN ACCORDANCE WITH PARAGRAPH 3.2 OF THE SPECIFICATIONS A
PRE-PRODUCTION SAMPLE WAS REQUIRED. HOWEVER, THE GOVERNMENT RESERVED
THE RIGHT TO WAIVE THAT REQUIREMENT AS TO BIDDERS WHO SUBMITTED AN
APPROVED PREPRODUCTION SAMPLE OF THE ITEM UNDER A PRIOR GOVERNMENT
CONTRACT AND WHO FURNISHED WITH THEIR BID THE NAME AND ADDRESS OF THE
GOVERNMENT AGENCY, THE CONTRACT NUMBER AND DATA INDICATING COMPLIANCE
WITH ALL SPECIFIED TEST CONDITIONS REQUIRED BY THE PRESENT
SPECIFICATIONS. THE BID PRICE BASED ON A WAIVER OF THE PREPRODUCTION
SAMPLE WAS TO BE USED IN THE EVALUATION OF THE LOWEST BIDDER ONLY IN THE
EVENT THAT THE GOVERNMENT DETERMINED AS TO A PARTICULAR BIDDER THAT THE
PREPRODUCTION SAMPLE WOULD BE WAIVED. IN CASES WHERE THE PREPRODUCTION
SAMPLE WAS NOT TO BE WAIVED, THE PRICE WITH PREPRODUCTION SAMPLE WAS TO
BE USED.
THE BIDS WERE RECEIVED AS FOLLOWS:
CHART
BOSTON KENT INGERSOLL
ITEM PNEUMATICS AIR TOOL WORTHINGTON JOY MFG. RAND
1A W/SAMPLE $350.00 $406.00 $446.00 $634.10 $504.00
1A W/O SAMPLE 297.00 383.00 388.00 NO BID 331.00
IB W/SAMPLE 350.00 404.00 443.00 630.00 540.00
IB W/O SAMPLE 297.00 383.00 388.00 NO BID 331.00
2A W/SAMPLE 350.00 406.00 446.00 635.19 504.00
2A W/O SAMPLE - 383.00 388.00 NO BID 331.00
2B W/SAMPLE 350.00 406.00 446.00 634.14 504.00
2B W/O SAMPLE - 383.00 388.00 NO BID 331.00
3A W/SAMPLE - 406.00 446.00 638.40 504.00
3A W/O SAMPLE - 383.00 388.00 NO BID 331.00
3B W/SAMPLE - 406.00 446.00 634.20 504.00
3B W/O SAMPLE - 383.00 388.00 NO BID 331.00
3C W/SAMPLE - 406.00 508.00 638.40 504.00
3C W/O SAMPLE - 383.00 388.00 NO BID 331.00
4 50.00 - INCLUDED - 1176.00
DISCOUNT TERMS 1/2 PERCENT
20 DAYS NET NET NET NET
BOSTON PNEUMATICS' BID FAILED TO ACKNOWLEDGE THE TWO AMENDMENTS TO
THE INVITATION AND WAS HELD TO BE NONRESPONSIVE AND JOY MANUFACTURING
COMPANY WAS NOT CONSIDERED BECAUSE OF ITS HIGH PRICE. KENT AIR TOOL HAD
FURNISHED AN END ITEM UNDER THIS SPECIFICATION; HOWEVER, THAT CONTRACT
DID NOT REQUIRE A PREPRODUCTION SAMPLE SO THAT NO TEST RESULTS WERE
AVAILABLE. THEREFORE, KENT'S BID COULD BE EVALUATED ONLY AT THE HIGHER
PRICE WHICH INCLUDED A PREPRODUCTION SAMPLE. ALTHOUGH YOU BID PRICES
BOTH WITH AND WITHOUT PREPRODUCTION SAMPLES, YOU DID NOT INCLUDE THE
INFORMATION CONCERNING PRIOR APPROVAL OF THE PREPRODUCTION SAMPLE, AND
STATED FURTHER THAT PREPRODUCTION SAMPLES HAD NEVER BEEN SUBMITTED TO
DEFENSE CONSTRUCTION SUPPLY CENTER. CONSEQUENTLY, YOUR BID COULD BE
EVALUATED ONLY AT THE HIGHER PRICE WITH PREPRODUCTION SAMPLES.
WORTHINGTON CORPORATION WAS A PRIOR PRODUCER UNDER A CONTRACT REQUIRING
A PREPRODUCTION SAMPLE AND SUBMITTED THE NECESSARY DATA OF TEST
APPROVAL, AND ITS BID WAS EVALUATED AT THE LOWER PRICE, EXCLUDING
PREPRODUCTION SAMPLES. AS LOW RESPONSIVE BIDDER, WORTHINGTON WAS
AWARDED THE CONTRACT ON AUGUST 23, 1965.
IT IS YOUR CONTENTION THAT ALL BIDS SHOULD BE EVALUATED ON A COMMON
BASIS, I.E., ALL AT THE PRICE INCLUDING PREPRODUCTION SAMPLES OR ALL AT
THE PRICE EXCLUDING PREPRODUCTION SAMPLES. TO DO OTHERWISE, YOU FEEL,
IS A RESTRICTION UPON COMPETITION BY ALLOWING SOME BIDDERS AN ADVANTAGE
OVER OTHERS. YOU FURTHER CONTEND THAT THE REQUIREMENT AND WAIVER
THEREOF OF PREPRODUCTION SAMPLES IS TANTAMOUNT TO A QUALIFIED PRODUCTS
LIST WHICH IS NOT PROVIDED FOR IN THE INVITATION FOR BIDS. FINALLY, YOU
INDICATE THAT PREPRODUCTION SAMPLES IN THIS CASE WERE UNNECESSARY AS THE
PRODUCT IS A WELL-KNOWN COMMERCIAL ITEM.
MAY WE FIRST POINT OUT THAT THE SITUATION IN THIS CASE DOES NOT
RESULT IN A QUALIFIED PRODUCTS LIST AS SUGGESTED BY YOU. THE QUALIFIED
PRODUCTS LIST RESTRICTS BIDDING TO THOSE MANUFACTURERS WHO HAVE HAD AN
ITEM APPROVED AND PLACED UPON THE LIST PRIOR TO BID OPENING. HOWEVER,
HERE ANY MANUFACTURER IS ENTITLED TO BID UPON THE PROCUREMENT. IN OTHER
WORDS, UNDER THE QUALIFIED PRODUCTS LIST THE PREPRODUCTION COSTS ARE
BORNE BY ALL PARTIES DESIRING TO BID AND ARE EXPENDED PRIOR TO CONTRACT
AWARD, WHILE, IN THE CASE OF PREPRODUCTION SAMPLES, THE COST IS BORNE
ONLY BY THE PARTY TO WHOM THE CONTRACT IS AWARDED.
THE PROCEDURE OF WHICH YOU COMPLAIN IS NOT NOVEL AND HAS BEEN
CONSIDERED BY THIS OFFICE IN PRIOR CASES. WE RECOGNIZE THE RESTRICTIVE
NATURE OF THE WAIVER OF PREPRODUCTION SAMPLES AS TO SOME BIDDERS BUT NOT
TO OTHERS. WHILE IT IS TRUE THAT ALL BIDDERS SHOULD HAVE EQUAL
OPPORTUNITY TO BID ON A COMMON BASIS, UNITED STATES V. BOOKRIDGE FARM,
OPPORTUNITY TO BID ON A COMMON BASIS, UNITED STATES V. BROOKRIDGE FARM,
111 F.2D 461, WE FEEL THAT THE INTEREST OF THE GOVERNMENT IS PARAMOUNT
TO THAT OF BIDDERS, 42 COMP. GEN. 717. ALSO SEE 36 COMP. GEN. 809,
WHERE WE UPHELD THE USE OF A QUALIFIED PRODUCTS LIST, AND 40 COMP. GEN.
35, WHERE WE SUSTAINED THE USE OF THE TWO-STEP PROCUREMENT PROCEDURE.
PREPRODUCTION SAMPLES ARE USED WHERE THE SPECIFICATIONS ARE NOT OF
SUFFICIENT DETAIL SO AS TO INSURE THAT ALL ARTICLES PRODUCED IN
ACCORDANCE THEREWITH WILL BE OF SIMILAR QUALITY AND PRIOR TESTING IS
NECESSARY TO INSURE THE PRODUCTION OF ITEMS WHICH WILL PERFORM PROPERLY.
GENERALLY, THE INITIAL CONTRACT FOR THE PRODUCTION OF AN ITEM INCLUDES
THE COST OF PREPRODUCTION ARTICLES AND THE COST IS BORNE WHOLLY OR IN
PART BY THE GOVERNMENT. THERE IS NO LOGICAL BASIS FOR THE GOVERNMENT TO
CONTINUE TO BEAR THE SAME COST ON EACH PROCUREMENT OF THE SAME ARTICLE.
ARMED SERVICES PROCUREMENT REGULATION 2-201 (B) (XIV), IN EFFECT AT THE
TIME OF THE ISSUANCE OF THE INVITATION, SPECIFICALLY PROVIDED FOR THE
WAIVER OF THE REQUIREMENT FOR PREPRODUCTION SAMPLES IN THE CASE OF
BIDDERS WHO PREVIOUSLY PRODUCED THE ARTICLE. WE HAVE HELD THAT IN CASES
WHERE THE REQUIREMENT IS WAIVED, BIDS MAY BE EVALUATED ON THE BASIS OF
THE PRICE WITH WAIVER. 42 COMP. GEN. 717; B-140361, NOVEMBER 10,
1959. RECOGNIZING THE DISPARITY BETWEEN PRIOR AND NEW PRODUCERS AND IN
AN EFFORT TO GAIN NEW SOURCES OF PRODUCTION AT MORE COMPETITIVE PRICES,
THE GOVERNMENT OFTEN INSERTS EQUALIZATION FACTORS INTO NEW INVITATIONS
FOR BIDS. FOR EXAMPLE, IN 41 COMP. GEN. 788, WE APPROVED A REQUIREMENT
THAT A PRIOR PRODUCER BE HELD TO AN EARLIER DELIVERY SCHEDULE THAN THAT
REQUIRED FOR A NEW PRODUCER. SUCH EQUALIZATION FACTORS, HOWEVER, ARE
NOT COMPELLED. WE HAVE FOUND THAT IN MANY CASES, EVEN WITHOUT
EQUALIZATION FACTORS,
NEW PRODUCER IS WILLING TO ABSORB THE PREPRODUCTION COSTS IN AN
EFFORT TO GET ITS FIRST CONTRACT FOR THE ARTICLE AND ENTER THE
COMPETITIVE FIELD. IT IS OUR OPINION THAT THE PROCEDURE FOLLOWED IN
THIS CASE IS THE MEDIAN BETWEEN PROTECTING THE INTEGRITY OF THE
COMPETITIVE BIDDING SYSTEM AND OBTAINING THE LOWEST COST TO THE
GOVERNMENT. ACCORDINGLY, SINCE YOU HAVE NOT PREVIOUSLY PRODUCED THIS
ARTICLE UNDER A CONTRACT REQUIRING PREPRODUCTION SAMPLES, YOUR BID MUST
BE EVALUATED ON THE BASIS OF FURNISHING PREPRODUCTION SAMPLES.
AS TO YOUR CONTENTION THAT THIS ITEM IS A REGULAR COMMERCIAL ITEM AND
THAT A PREPRODUCTION SAMPLE IS UNNECESSARY, WE HAVE CONSISTENTLY HELD
THAT THE DRAFTING OF PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF
THE GOVERNMENT AND THE DETERMINATION OF WHETHER OR NOT ARTICLES OFFERED
BY BIDDERS MEET THOSE SPECIFICATIONS IS THE RESPONSIBILITY OF THE
ADMINISTRATIVE AGENCY. 17 COMP. GEN. 554 AND 36 ED. 251. MILITARY
SPECIFICATION MIL-D-52121 HAS BEEN APPROVED BY THE DEPARTMENT OF DEFENSE
AND IS MANDATORY FOR USE BY THE MILITARY DEPARTMENTS. IT REQUIRES THE
FURNISHING OF A PREPRODUCTION SAMPLE AND THIS OFFICE WILL NOT QUESTION
THE APPROPRIATENESS OF SUCH DETERMINATION. 42 COMP. GEN. 717.
B-150090, NOV. 9, 1965
TO THE SECRETARY OF AGRICULTURE:
BY LETTER DATED SEPTEMBER 15, 1965, WITH ENCLOSURES, ASSISTANT
SECRETARY JOHN A. BAKER REQUESTED OUR DECISION AS TO WHETHER THE COST OF
REPAIRING DAMAGE TO THE HELENA (MONTANA) AIRPORT CAUSED BY THE
OPERATIONS OF CISCO AIRCRAFT, INC., UNDER CONTRACT NO. 12-11-261-2002
WITH THE FOREST SERVICE MAY BE PAID UNDER THE PROVISIONS OF CONTRACT NO.
12-1 BETWEEN THE FOREST SERVICE AND THE JOINT CITY-COUNTY AIRPORT BOARD
FOR THE USE OF THE AIRPORT FACILITIES.
IN OUR DECISION OF DECEMBER 14, 1962, WE CONSIDERED THE QUESTION
WHETHER A FINAL PAYMENT VOUCHER SUBMITTED TO MR. H. A. EDD, AUTHORIZED
CERTIFYING OFFICER, DRAWN IN FAVOR OF THE DEMING NATIONAL BANK IN THE
AMOUNT OF $49,784, AS ASSIGNEE UNDER THE CISCO CONTRACT, COULD BE
CERTIFIED FOR PAYMENT IN VIEW OF THE PENDING CLAIM BY THE AIRPORT BOARD
FOR AN UNDETERMINED AMOUNT OF DAMAGES CAUSED TO RUNWAYS AND TAXIWAYS BY
THE SPILLAGE OF INSECTICIDE BY CISCO AIRCRAFT. IN VIEW OF THE
HOLD-HARMLESS CLAUSE IN THE CISCO CONTRACT, THE INSURANCE COVERAGE CISCO
WAS REQUIRED TO OBTAIN UNDER ITS CONTRACT, AND THE CONSENT OF CISCO TO
THE WITHHOLDING OF $5,000 OF THE FINAL CONTRACT PAYMENT, WE AUTHORIZED
CERTIFICATION OF THE VOUCHER IN THE REDUCED AMOUNT OF $44,784.
SECTION 9 (A) OF CONTRACT NO. 12-1 UNQUALIFIEDLY OBLIGATED THE FOREST
SERVICE TO REPAIR "DAMAGE TO RUNWAYS, TAXIWAYS OR OTHER FACILITIES OVER
AND ABOVE NORMAL WEAR CAUSED BY AIRCRAFT.' THE OBLIGATION OF THE FOREST
SERVICE TO REPAIR IS NOT DEPENDENT UPON ANY EXHAUSTION OF REMEDIES UNDER
THE CISCO CONTRACT; NOR IS THE AIRPORT BOARD SUBROGATED IN ANY WAY
UNDER THE HOLD-HARMLESS CLAUSE OF THE CISCO CONTRACT. WE THEREFORE ARE
OF THE OPINION THAT THE CLAIM OF THE AIRPORT BOARD SHOULD BE SETTLED AND
ADJUSTED ADMINISTRATIVELY UNDER CONTRACT NO. 12-1. HOWEVER, AS
INDICATED IN OUR DECEMBER 14, 1962, DECISION, WE BELIEVE THAT THE
FARWEST GENERAL AGENCY AS THE INSURANCE CARRIER OF CISCO IS LEGALLY
RESPONSIBLE UNDER SECTION 16.4 OF CONTRACT NO. 12-11-261-2002, ITS
CONTRACT OF INSURANCE, AND ITS VERIFICATION OF INSURANCE CERTIFICATE TO
REIMBURSE THE GOVERNMENT IN THE AMOUNT OF THE AIRPORT BOARD CLAIM AS
FINALLY SETTLED. WE AGREED WITH YOUR PROPOSAL TO ATTEMPT TO RECOVER THE
COST OF THE REPAIR TO THE AIRPORT UNDER THE HOLD-HARMLESS CLAUSE OF THE
CONTRACT WITH CISCO.
B-154967, NOV. 9, 1965
TO LEE WAY MOTOR FREIGHT, INC. :
FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1965, FILE
TD-1389/65-N, IN WHICH YOUR REQUESTED A COPY OF OUR DECISION B-154967,
DATED DECEMBER 21, 1964, AND ASKED WHETHER FREIGHT CHARGES ON SHIPMENTS
MOVING UNDER LEE WAY SECTION 22 QUOTATION NO. 298 ARE SUBJECT TO AUDIT
IN THE GENERAL ACCOUNTING OFFICE.
AS YOU WILL NOTE FROM THE ATTACHED COPY, OUR DECISION B-154967 WAS
ADDRESSED TO MR. LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION (GSA), IN CONNECTION WITH A PILOT PROGRAM BEING
CONDUCTED AT THE GSA SUPPLY DEPOT, HINGHAM, MASSACHUSETTS, TO DEVISE A
COMPLETE AUTOMATIC DATA PROCESSING SYSTEM FOR THE SUPPLY CYCLE,
INVOLVING, AMONG OTHER OPERATIONS, SELECTION OF TRANSPORTATION MODE AND
CARRIER, DETERMINATION OF TRANSPORTATION COSTS AND PREPARATION OF BILLS
OF LADING. IT WAS ALSO PROPOSED THAT IF INITIAL USE OF THE EXPERIMENTAL
QUOTATIONS PROVED SUCCESSFUL, SIMILAR ARRANGEMENTS WOULD BE EXTENDED TO
OTHER SECTIONS OF THE COUNTRY.
INFORMATION AS TO THE METHODS EMPLOYED BY GSA IN DETERMINING THE
AVERAGES USED IN FORMULATING THE QUOTATIONS WAS FURNISHED THIS OFFICE,
AND THE PROCEDURE AND CONTROLS USED IN THE FORMULATION OF A SIMPLIFIED
SYSTEM OF RATES APPEARED TO BE ADEQUATE. THERE WAS FOR CONSIDERATION,
IN ADDITION TO LOWER OVERALL TRANSPORTATION CHARGES, THE SAVINGS IN
MANPOWER AND PAPER WORK IN CONNECTION WITH ADMINISTRATIVE AND ACCOUNTING
OPERATIONS, AND IT COULD BE EXPECTED THAT THE USE OF THE FREIGHT, ALL
KINDS (FAK), QUOTATIONS WOULD FACILITATE OUR AUDIT OF THE PAYMENT
VOUCHERS. BECAUSE, HOWEVER, THE SIMPLIFIED RATE STRUCTURE SET UP IN THE
QUOTATIONS MIGHT, IN A FEW INSTANCES, RESULT IN THE PAYMENT OF HIGHER
CHARGES ON CERTAIN COMMODITIES THAN THOSE RESULTING FROM PUBLISHED
TARIFFS, GSA SOUGHT ASSURANCE THAT OUR OFFICE WOULD NOT STATE
OVERCHARGES IN SUCH EXCEPTIONAL INSTANCES. IN APPROVING THE PROJECT AND
GRANTING SUCH ASSURANCE, WE INDICATED THAT WE EXPECTED TO REVIEW
OPERATIONS UNDER THE FAK QUOTATIONS INVOLVED, AND IF OUR AUDIT DISCLOSED
THAT THE BEST INTERESTS OF THE GOVERNMENT WERE NOT BEING SERVED, WE
WOULD CONTACT GSA IN ORDER TO OBTAIN NECESSARY ADJUSTMENTS OR
DISCONTINUANCE OF THE PROGRAM.
IT SHOULD BE NOTED THAT OUR DECISION TO MR. KNOTT IS NOT INTENDED TO
SUGGEST ANY DEPARTURE FROM OUR STATUTORY DUTY TO AUDIT PAYMENTS MADE FOR
TRANSPORTATION SERVICES. WHILE OUR PURPOSE IS TO COOPERATE WITH
ADMINISTRATIVE AGENCIES IN THE ADOPTION OF ADVANTAGEOUS SIMPLIFIED RATE
PROCEDURES IN CONNECTION WITH GOVERNMENT SHIPMENTS, WE WILL CONTINUE TO
AUDIT PAYMENTS MADE PURSUANT TO SECTION 22 QUOTATIONS ISSUED UNDER SUCH
ARRANGEMENTS TO DETERMINE WHETHER THEY ARE IN COMPLIANCE WITH THE
APPLICABLE QUOTATIONS.
WITH RESPECT TO OUR AUDIT OF CHARGES ACCRUING UNDER INDIVIDUAL
QUOTATIONS, WE WILL ADHERE GENERALLY TO THE POLICY STATED, SUBJECT TO
THE TERMS AND PROVISIONS CONTAINED IN SUCH QUOTATIONS. IN THE CASE OF
YOUR QUOTATION NO. I.C.C. 298, WE NOTE THAT ITEM 21, ON FIRST REVISED
PAGE 3, PROVIDES: "THIS TENDER SHALL NOT APPLY WHERE CHARGES ACCRUING
HEREUNDER EXCEED CHARGES OTHERWISE APPLICABLE FOR THE SAME SERVICE.'
UNDER SUCH A PROVISION IT APPEARS THAT THE CHARGE BASIS AFFORDED IN THE
QUOTATION IS SUPERSEDED IN ANY INSTANCE WHERE A LOWER CHARGE BASIS IS
SET FORTH IN
B-157543, NOV. 9, 1965
TO MR. D. E. WRIGHT, PRESIDENT, GENERAL NUCLEONICS CORPORATION:
REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 20 AND SEPTEMBER 13,
1965, PROTESTING THE ISSUANCE BY THE DEPARTMENT OF THE NAVY OF CHANGE
ORDERS FOR A TRANS-SONICS OIL INDICATING SYSTEM FOR INSTALLATION IN NAVY
F-4 AIRCRAFT.
WHILE YOU HAVE ALLEGED THAT THE TRANS-SONICS INDICATING SYSTEM IS
OUTDATED BECAUSE IT MEASURES OIL QUANTITY AT ONLY TWO POINTS, THE NAVY
HAS INDICATED THAT THE TRANS-SONICS SYSTEM IS CAPABLE OF CONTINUOUS
MEASURING AND IS IN FACT INSTALLED AS SUCH A MEASURING DEVICE IN THE
F-111 AIRCRAFT, BUT THAT FOR THE F-4 AIRCRAFT IT WAS DECIDED EARLY IN
1963 THAT A TWO-POINT INDICATING SYSTEM WOULD BE PREFERABLE OVER A
CONTINUOUS READING SYSTEM BECAUSE HIGH AND LOW LEVEL INDICATIONS WERE
ALL THAT WERE NEEDED. IN THAT CONNECTION, IT IS REPORTED THAT BEFORE
CHANGE ORDERS WERE ISSUED IN MAY 1965 TO INCORPORATE THE TRANS-SONICS
SYSTEM INTO THE F-4 AIRCRAFT, THE TRANS-SONICS SYSTEM WAS TESTED
THOROUGHLY FOR MORE THAN 265 FLIGHT HOURS AND WAS DETERMINED TO BE
HIGHLY DESIRABLE FOR SERVICE USE BY THE NAVAL AIR TEST CENTER.
ADDITIONALLY, IT IS REPORTED THAT THE MEASURING SYSTEM HAS BEEN UTILIZED
FOR SEVERAL THOUSAND HOURS AT PRATT AND WHITNEY AIRCRAFT WITHOUT A
SINGLE FAILURE. FURTHER, THE NAVY DENIES YOUR CONTENTION THAT
INSTALLATION OF THE TRANS-SONICS SYSTEM REQUIRES MODIFICATION OF THE
ENGINE OIL TANKS. THE NAVY STATES THAT ALTHOUGH THE PROBES ARE
INTERNALLY MOUNTED, THEY CAN BE ATTACHED EASILY WITHOUT ANY TANK
CHANGES.
WITH REGARD TO YOUR CONTENTION THAT THE AIR FORCE HAS STANDARDIZED
FOR ALL AIRCRAFT ON A NUCLEONIC OIL GAUGE AS SPECIFIED IN MILITARY
SPECIFICATION MIL-Q-38338A, ENTITLED "OIL QUANTITY GAGE SYSTEMS,
CONTINUOUS TRANSISTORIZED NUCLEONIC, GENERAL SPECIFICATION," THE NAVY
HAS REPORTED THAT ITS INFORMATION IS THAT THE AIR FORCE HAS NO
ESTABLISHED REQUIREMENT FOR EITHER A TWO-POINT WARNING OR CONTINUOUS OIL
INDICATING SYSTEM FOR THE F-4 AND HAS MADE NO DETERMINATION AS TO WHAT
WILL BE USED IN THE F-102 AND F-106. MOREOVER, IT IS STATED THAT BOTH
THE AIR FORCE AND THE NAVY F-111 WILL USE THE TRANS-SONICS SYSTEM.
WITH REGARD TO YOUR SUGGESTION THAT THERE WOULD BE A LARGE COST
SAVINGS TO THE GOVERNMENT ON THE UNIT AND INSTALLATION COST IF YOUR
SYSTEM WERE UTILIZED, OUR OFFICE HAS BEEN ADVISED THAT WHILE THE ENTIRE
COST OF A TELEPANEL MODIFICATION HAS BEEN CHARGED AGAINST THE OIL
QUANTITY SYSTEM, IN REALITY ONLY A PORTION OF THE COST IS DIRECTLY
ATTRIBUTABLE TO THE SYSTEM SINCE OTHER MODIFICATIONS ON THE PANEL WERE
NEEDED FOR OTHER AIRCRAFT SYSTEMS AS WELL AND A SIMILAR COST WOULD
HAVE TO BE ADDED TO YOUR COMPANY'S SYSTEM IF IT WERE INSTALLED.
FURTHER WITH RESPECT TO YOUR STATEMENT THAT YOUR COMPANY IS SELLING ITS
UNITS FOR $437 A UNIT WHEREAS THE NAVY IS PLANNING TO PAY OVER $1,100 A
SYSTEM FOR THE TRANS-SONICS UNITS, THE NAVY POINTS OUT THAT A SYSTEM FOR
THE F-4 AIRCRAFT IS MADE UP OF TWO UNITS SO THAT BEFORE COMPARING THE
PRICES OF THE TWO SYSTEMS, YOUR COMPANY'S PRICE SHOULD BE DOUBLED. ON
THAT BASIS THE NAVY CONSIDERS THE UNIT COST OF BOTH SYSTEMS COMPARABLE.
IN ANY EVENT, THE NAVY REPORTS THAT THE NUCLEONIC OIL INDICATING
SYSTEM PROPOSED BY YOUR COMPANY FOR THE F-4 AIRCRAFT WOULD NOT BE
ACCEPTABLE BECAUSE IT IS MOUNTED EXTERNAL TO THE OIL TANKS AND WOULD BE
UNDULY EXPOSED TO DAMAGE. IN THAT REGARD, IT IS STATED THAT THERE IS
ONLY ABOUT AN INCH CLEARANCE BETWEEN THE OIL TANKS AND THE ENGINE
HOUSING AND IN PERFORMING ROUTINE ENGINE CHANGES, NAVY EXPERIENCE HAS
INDICATED THAT THE OIL TANKS ARE FREQUENTLY DENTED. SINCE THE
NUCLEONIC OIL INDICATING SYSTEM PROPOSED BY YOUR COMPANY IS EXTERNAL
TO THE OIL TANKS, IT IS INDICATED THAT THEY MIGHT RECEIVE DAMAGE FROM
ENGINE CHANGES AS WELL. FURTHER, IT IS STATED THAT THERE IS PRESENTLY
NO SPACE AVAILABLE ON THE INSTRUMENT PANEL FOR THE OIL QUANTITY GAUGES
WHICH WOULD BE NECESSARY. IT IS STATED THAT TO MAKE SPACE AVAILABLE
BOTH FOR AN EXTERNALLY MOUNTED NUCLEONIC OIL INDICATING SYSTEM AND FOR
RELATED OIL QUANTITY GAUGES WOULD REQUIRE SIGNIFICANT MODIFICATION OF
THE STRUCTURE OF THE AIRCRAFT. FURTHERMORE, IT IS STATED THAT YOUR
COMPANY'S SYSTEM IS NOT ON A QUALIFIED PRODUCTS LIST AND HAS NOT PASSED
QUALIFICATION TESTS, SO THAT EVEN IF SPACE WERE AVAILABLE FOR
INSTALLATION OF IT IN THE F-4 AIRCRAFT, THE NAVY WOULD HESITATE TO ORDER
IT. IN THAT REGARD, THE NAVY STATES THE CHANGE ORDER CALLING FOR THE
INSTALLATION OF THE TRANS-SONICS OIL INDICATING SYSTEM WAS NECESSITATED
BY SAFETY-OF-FLIGHT CONSIDERATIONS AND FOR THIS REASON THE CHANGE COULD
NOT HAVE BEEN POSTPONED UNTIL THE QUALIFICATION OF YOUR COMPANY'S SYSTEM
IS COMPLETED.
ESSENTIALLY WHAT IS INVOLVED IN THIS CASE IS A QUESTION OF WHETHER
THE PRODUCT MANUFACTURED BY YOUR COMPANY OR THAT PRODUCED BY SOME OTHER
COMPANY WOULD BE SATISFACTORY FOR THE GOVERNMENT'S NEEDS. OUR OFFICE
HAS LONG REGARDED THE ANSWER TO SUCH QUESTIONS AS FALLING WITHIN THE
PREROGATIVE OF THE CONTRACTING AGENCIES OF THE GOVERNMENT. IN THAT
REGARD, OUR OFFICE STATED IN 36 COMP. GEN. 251, 252:
"THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT
THE NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER
ARTICLES OFFERED BY BIDDERS MEET THOSE SPECIFICATIONS IS PRIMARILY FOR
ADMINISTRATIVE AGENCIES. 17 COMP. GEN. 554. WHILE IT IS THE DUTY
OF THIS OFFICE TO DETERMINE WHETHER SPECIFICATIONS AS WRITTEN ARE
UNDULY RESTRICTIVE OF COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY
BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING
THE GOVERNMENT'S NEED IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE
SPECIFICATIONS ARE UNDULY RESTRICTIVE. 30 COMP. GEN. 368; 33 ID.
586. THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT
MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT
REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOR IS THE GOVERNMENT
TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE
SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT,
IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET
THE AGENCY'S NEED.'
IN VIEW OF THE FOREGOING, WE DO NOT BELIEVE THAT ANY FURTHER ACTION
IS REQUIRED BY OUR OFFICE IN THIS MATTER.
B-157832, NOV. 9, 1965
TO TIMMONS, BUTT AND HEAD, INC. :
YOUR LETTER OF OCTOBER 7, 1965, ADDRESSED TO THE GENERAL SERVICES
ADMINISTRATION (GSA), PROTESTS AWARD OF A CONTRACT TO ANY BIDDER OTHER
THAN YOU UNDER INVITATION FOR BIDS (IFB), PROJECT NO. GS-05BC-5494,
DATED AUGUST 18, 1965.
THE IFB SOLICITED BIDS TO PERFORM CERTAIN MISCELLANEOUS REPAIRS AT
THE DMS DEPOT, DAYTON, OHIO.
THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS CONCERNS, AND BID
OPENING WAS SCHEDULED FOR SEPTEMBER 13.
SECTION 3 OF THE SPECIAL CONDITIONS OF THE IFB STIPULATED THAT
MINIMUM WAGE RATES SPECIFIED IN AN ATTACHED WAGE DETERMINATION DECISION
OF THE SECRETARY OF LABOR WERE REQUIRED TO BE PAID UNDER THE CONTRACT.
HOWEVER, SINCE THE SECRETARY'S DECISION WAS NOT AVAILABLE AT THE TIME
THE IFB WAS ISSUED, THERE WAS INSERTED IN THE IFB AFTER SECTION 3 A PAGE
BEARING THE FOLLOWING NOTATIONS:
"THE WAGE DETERMINATION DECISION OF THE SECRETARY OF LABOR MENTIONED
IN PARAGRAPHS 3-1, 3-2 AND 3-3 WAS NOT AVAILABLE AT THE TIME THIS
SPECIFICATION WAS PLACED ON THE MARKET.
"ANY CONTRACT ENTERED INTO PURSUANT TO THIS REQUEST FOR BIDS WILL BE
SUBJECT TO THE PAYMENT OF THE PREVAILING WAGE RATE FOR THE AREA AND TYPE
OF WORK INVOLVED, AS MAY BE DETERMINED AND ISSUED BY THE U.S.
DEPARTMENT OF LABOR. A COPY OF THE WAGE RATE DECISION WILL BE FURNISHED
BY AMENDMENT TO THE SPECIFICATIONS AS SOON AS IT IS ISSUED.'
THE IFB ALSO INCLUDED A NOTICE TO BIDDERS LISTING VARIOUS
REQUIREMENTS TO BE CHECKED BEFORE BID SUBMISSION, INCLUDING THE
FOLLOWING:
"3. HAVE YOU ACKNOWLEDGED, ON THE SF-21, BID FORM, RECEIPT OF ALL
AMENDMENTS (IF ANY) ISSUED TO THE SPECIFICATIONS? "
ON SEPTEMBER 2, GSA ISSUED AMENDMENT NO. 1 TO THE IFB FURNISHING TO
BIDDERS THE WAGE RATES APPLICABLE TO THE PROJECT, IN ACCORDANCE WITH
DECISION OF THE SECRETARY OF LABOR NO. AE-529, DATED SEPTEMBER 7, TO BE
INCLUDED AS A PART OF SECTION 3 OF THE SPECIFICATIONS. THE AMENDMENT
CARRIED A NOTATION READING AS FOLLOWS:
"IMPORTANT - BIDDER MUST ACKNOWLEDGE THE RECEIPT OF THIS AMENDMENT ON
THE BID FORM, GIVING THE NUMBER AND DATE. FAILURE TO DO SO MAY BE
GROUNDS FOR REJECTION OF THE BID.'
SEVEN BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 13. YOUR BID OF
$41,313, DATED SEPTEMBER 13, WAS LOWEST. HOWEVER, SINCE YOU HAD NOT
ACKNOWLEDGED THE AMENDMENT, YOUR BID WAS DETERMINED TO BE NONRESPONSIVE.
SUBSEQUENT TO BID OPENING, GSA ASCERTAINED THAT YOUR NAME HAD NOT
BEEN SHOWN ON THE BIDDER'S MAILING LIST FOR THE PROJECT; THAT YOU HAD
OBTAINED AT THE DAYTON BUILDERS EXCHANGE, PRIOR TO BID OPENING, COPIES
OF THE BID DOCUMENTS BUT NOT OF THE AMENDMENT; AND THAT YOU FIRST
LEARNED OF THE AMENDMENT AFTER BID OPENING.
YOU URGE THAT AWARD SHOULD BE MADE TO YOU IN VIEW OF YOUR LOW BID.
YOU CONTEND THAT SINCE BY THE TERMS OF SECTION 3 OF THE SPECIAL
CONDITIONS YOUR BID OBLIGATED YOU TO ABIDE BY THE WAGE RATES PRESCRIBED
BY THE SECRETARY OF LABOR, YOUR FAILURE TO ACKNOWLEDGE THE IFB AMENDMENT
DOES NOT RELIEVE YOU OF SUCH OBLIGATION AND CONSTITUTES A MERE
TECHNICALITY THAT SHOULD BE WAIVED. YOU FURTHER CONTEND THAT SINCE ONLY
ONE WAGE RATE DETERMINATION WAS ISSUED THERE CAN BE NO CONFUSION AS
CONTRASTED WITH A SITUATION IN WHICH A PREVAILING WAGE RATE
DETERMINATION IS CHANGED BY AN IFB AMENDMENT. YOU HAVE ALSO STATED IN
DISCUSSIONS WITH GSA THAT THE AMENDMENT WOULD HAVE NO EFFECT ON YOUR BID
SINCE YOU HAVE BEEN PAYING THE GOING WAGE IN THE COMMUNITY, WHICH, YOU
CLAIM, IS EQUIVALENT TO THE MINIMUM SET FORTH IN THE WAGE RATE DECISION
IN QUESTION.
SECTION 1 OF THE DAVIS BACON ACT, 40 U.S.C. 276A, DIRECTS THAT EVERY
CONTRACT FOR CONSTRUCTION, ALTERATION AND/OR REPAIRS, INCLUDING PAINTING
AND DECORATING, SHALL CONTAIN CERTAIN MINIMUM WAGE REPRESENTATIONS AND
STIPULATIONS. WE HAVE HELD THAT A BLANKET PROVISION IN SPECIFICATIONS
THAT CONTRACTORS SHALL PAY MINIMUM WAGE RATES, REGARDLESS OF WHETHER THE
WAGE RATE DETERMINATIONS ARE RECEIVED BEFORE OR AFTER BID OPENING, DOES
NOT MEET THE STATUTORY REQUIREMENT. 40 COMP. GEN. 48.
IN THE INSTANT CASE, HOWEVER, THE LANGUAGE USED IN THE SHEET ATTACHED
TO SECTION 3 OF THE SPECIAL CONDITIONS OF THE IFB, EXPLAINING THAT THE
WAGE RATE DETERMINATION WOULD BE FURNISHED BY AMENDMENT TO THE IFB
SPECIFICATIONS, LEFT NO DOUBT THAT SUCH WAGE RATES WERE TO BE CONSIDERED
IN SUBMITTING BIDS UNDER THE IFB. IT WAS OBVIOUS, THEREFORE, THAT THE
WAGE RATE DETERMINATION WAS INTENDED TO BE MADE AVAILABLE BEFORE BID
OPENING. ACCORDINGLY, IT IS OUR VIEW THAT THE REQUIREMENT OF THE
DAVIS-BACON ACT WAS MET WHEN THE AMENDMENT WAS ISSUED FURNISHING THE
WAGE SCHEDULE.
TURNING NOW TO THE EFFECT OF YOUR FAILURE TO ACKNOWLEDGE THE
AMENDMENT, IT IS THE GENERAL RULE THAT IF AN ADDENDUM TO AN INVITATION
AFFECTS THE PRICE, QUANTITY OR QUALITY OF THE PROCUREMENT, THE FAILURE
OF THE BIDDER TO ACKNOWLEDGE ITS RECEIPT IN THE MANNER REQUIRED BY THE
INVITATION RENDERS THE BID NONRESPONSIVE AND CANNOT BE WAIVED. 37 COMP.
GEN. 785. THE BASIS FOR SUCH RULE IS THAT GENERALLY THE BIDDER WOULD
HAVE AN OPTION TO DECIDE AFTER BID OPENING TO BECOME ELIGIBLE FOR AWARD
BY FURNISHING EXTRANEOUS EVIDENCE THAT THE ADDENDUM HAD BEEN CONSIDERED
OR TO AVOID AWARD BY REMAINING SILENT. 41 COMP. GEN. 550 AND DECISIONS
THEREIN CITED.
THE PROCUREMENT REGULATION WHICH GOVERNS WAIVER OF MINOR
INFORMALITIES OR IRREGULARITIES IN BIDS SUBMITTED UNDER GSA INVITATIONS
TO BID IS FEDERAL PROCUREMENT REGULATION 1-2.405, WHICH READS, IN PART,
AS FOLLOWS:
"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:
"/1) THE BID RECEIVED CLEARLY INDICATES THAT THE BIDDER RECEIVED THE
AMENDMENT, SUCH AS WHERE THE AMENDMENT ADDED ANOTHER ITEM TO THE
INVITATION FOR BIDS AND THE BIDDER SUBMITTED A BID HEREON; OR
"/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.'
SINCE THE WAGE RATES PAYABLE UNDER A CONTRACT DIRECTLY AFFECT THE
CONTRACT PRICE, THERE CAN BE NO QUESTION THAT THE IFB PROVISION
REQUIRING THE PAYMENT OF MINIMUM WAGES TO BE PRESCRIBED BY THE SECRETARY
OF LABOR WAS A MATERIAL REQUIREMENT OF THE IFB AS AMENDED. AS STATED
PREVIOUSLY, THE REQUIREMENTS OF THE DAVIS-BACON ACT WERE MET WHEN THE
AMENDMENT FURNISHING THE MINIMUM WAGE SCHEDULE WAS ISSUED, THE PURPOSE
OF THE ACT BEING TO MAKE DEFINITE AND CERTAIN AT THE TIME OF THE
CONTRACT AWARD THE CONTRACT PRICE AND THE MINIMUM WAGES TO BE PAID
THEREUNDER. 17 COMP. GEN. 471, 473. IN SUCH CIRCUMSTANCES, IT IS OUR
VIEW THAT A BIDDER WHO FAILED TO INDICATE BY ACKNOWLEDGMENT OF THE
AMENDMENT OR OTHERWISE THAT HE HAD CONSIDERED THE WAGE SCHEDULE COULD
NOT, WITHOUT HIS CONSENT, BE REQUIRED TO PAY WAGE RATES WHICH WERE
PRESCRIBED THEREIN BUT WHICH WERE NOT SPECIFIED IN THE ORIGINAL IFB,
NOTWITHSTANDING THAT HE MIGHT ALREADY BE PAYING THE SAME OR HIGHER WAGE
RATES TO HIS EMPLOYEES UNDER AGREEMENTS WITH LABOR UNIONS OR OTHER
ARRANGEMENTS. ACCORDINGLY, IN OUR OPINION, THE DEVIATION WAS MATERIAL
AND NOT SUBJECT TO WAIVER UNDER THE PROCUREMENT REGULATION. B-138242,
JANUARY 2, 1959. FURTHERMORE, TO AFFORD YOU AN OPPORTUNITY AFTER BID
OPENING TO BECOME ELIGIBLE FOR AWARD BY AGREEING TO ABIDE BY THE WAGE
SCHEDULE WOULD BE UNFAIR TO THE OTHER BIDDERS WHOSE BIDS CONFORMED TO
THE REQUIREMENTS OF THE AMENDED IFB AND WOULD BE CONTRARY TO THE PURPOSE
OF THE PUBLIC PROCUREMENT STATUTES. B-149315, AUGUST 28, 1962;
B-146354, NOVEMBER 27, 1961.
IN THE CIRCUMSTANCES, WE MUST CONCUR WITH THE ADMINISTRATIVE
DETERMINATION THAT YOUR BID IS NONRESPONSIVE AND THEREFORE NOT ELIGIBLE
FOR CONSIDERATION FOR AWARD. ACCORDINGLY, YOUR PROTEST IS DENIED.
B-157952, NOV. 9, 1965
TO MRS. MARTHA ROHRBAUGH:
YOUR LETTER OF OCTOBER 17, 1965, IN EFFECT, REQUESTS REVIEW OF THE
ACTION OF OUR CLAIMS DIVISION DATED OCTOBER 12, 1965, IN DENYING YOUR
CLAIM FOR AN ADDITIONAL LUMP-SUM PAYMENT FOR ANNUAL LEAVE ACCRUED BY
YOUR LATE HUSBAND AS AN EMPLOYEE OF THE DEPARTMENT OF THE NAVY. THE
DENIAL OF YOUR CLAIM WAS BASED ON THE FACT THAT APPLICABLE STATUTES AND
REGULATIONS LIMIT THE AMOUNT OF ANNUAL LEAVE WHICH YOUR HUSBAND COULD
ACCRUE TO 360 HOURS OR 45 DAYS FOR WHICH YOU HAVE BEEN PAID.
WE POINT OUT THAT IN 1951 WHEN THE ANNUAL AND SICK LEAVE ACT WAS
PASSED, SECTION 203 (D) OF THAT ACT PROVIDED THAT OVERSEAS EMPLOYEES OF
THE FEDERAL GOVERNMENT WERE ENTITLED TO ACCUMULATE ANNUAL LEAVE IN AN
AMOUNT NOT TO EXCEED 90 DAYS OR 720 HOURS. IF THIS LAW HAD REMAINED IN
EFFECT IT IS POSSIBLE THAT YOUR HUSBAND COULD HAVE ACCRUED UP TO THAT
AMOUNT OF ANNUAL LEAVE FOR WHICH YOU WOULD BE ENTITLED TO A LUMP-SUM
PAYMENT. HOWEVER, IN 1953 THE ABOVE PROVISION WAS AMENDED AND THE
AMOUNT OF ANNUAL LEAVE WHICH A PERSON IN YOUR LATE HUSBAND'S CATEGORY
(OVERSEAS) COULD ACCRUE WAS DECEASED TO 45 DAYS OR 360 HOURS. AFTER AN
EMPLOYEE ATTAINS THE LIMIT OF 360 HOURS OF ANNUAL LEAVE ANY FURTHER
LEAVE EARNED IS FORFEITED IF NOT USED BY THE BEGINNING OF THE NEXT LEAVE
YEAR. PERHAPS THE WORDING OF OUR LETTER OF OCTOBER 12, 1965, TO YOU,
WAS NOT AS CLEAR AS IT COULD HAVE BEEN FOR YOU APPARENTLY HAVE CONCLUDED
THAT PERSONS SERVING OVERSEAS, SUCH AS YOUR HUSBAND, WERE BEING
DISCRIMINATED AGAINST BY NOT BEING PERMITTED TO ACCRUE AS MUCH LEAVE AS
PERSONS IN OTHER CATEGORIES. IN FACT, THE CONTRARY IS TRUE. YOUR
HUSBAND WAS IN A PREFERRED CATEGORY INASMUCH AS THE STATUTE ALLOWS
EMPLOYEES STATIONED IN THE CONTINENTAL UNITED STATES TO ACCUMULATE ONLY
30 DAYS OR 240 HOURS OF ANNUAL LEAVE.
FINALLY, YOU STATE THAT MR. ROHRBAUGH WENT OVERSEAS IN 1949 BUT YOU
DO NOT CLAIM THAT HE BEGAN WORK FOR THE FEDERAL GOVERNMENT AT THAT TIME.
ACCORDINGLY, SINCE OUR RECORDS INDICATE THAT HE STARTED WORK IN 1954 HE
COMES WITHIN THE PROVISIONS OF THE 1953 AMENDMENT AND NOT THE ORIGINAL
STATUTE OF 1951. IN THE ABSENCE OF AFFIRMATIVE PROOF ON YOUR PART THAT
MR. ROHRBAUGH COMMENCED WORK PRIOR TO 1953 AND HAD ACCRUED ANNUAL LEAVE
IN EXCESS OF 360 HOURS, WHICH HE WAS AUTHORIZED TO CARRY WITH HIM TO THE
NAVY DEPARTMENT, WE MUST AFFIRM THE DISALLOWANCE OF YOUR CLAIM.
WE ARE ENCLOSING COPIES OF PERTINENT PARTS OF THE ABOVE-MENTIONED
STATUTES TO FACILITATE YOUR UNDERSTANDING IN THIS MATTER.
B-157156, NOV. 8, 1965
TO ELCOM, A DIVISION OF AUDIGER, INC. :
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 1, 1965,
PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER
REQUEST FOR PROPOSALS (RFP) NO. AMC-36-005-65-12, ISSUED JUNE 1, 1965,
BY THE LETTERKENNY ARMY DEPOT.
ON MAY 26, 1965, THE CONTRACTING OFFICER MADE A DETERMINATION IN THIS
CASE THAT, PURSUANT TO 10 U.S.C. 2304 (A) (10) AND PARAGRAPH 3/210.2
(VIII) OF THE ARMED SERVICES PROCUREMENT REGULATION, THE PROCUREMENT FOR
THE STUDY OF TAERS BY FORMAL ADVERTISING WAS IMPRACTICABLE BECAUSE IT
CONTEMPLATED STUDIES OR SURVEYS OTHER THAN THOSE WHICH MIGHT BE
NEGOTIATED UNDER ASPR 3-205 OR 3-211.
THE RFP WAS ISSUED WITH THE INTENT OF NEGOTIATING A CONTRACT FOR
REVIEWING AND EVALUATING ALL THE ARMY EQUIPMENT RECORDS SYSTEM (TAERS)
DATA (TM-28-750) FOR COMPLETION WITHIN 27 WEEKS AFTER DATE OF AWARD.
NINETEEN PROPOSALS WERE RECEIVED PRIOR TO THE CLOSE OF BUSINESS (4:15
P.M., E.D.T.), JUNE 15, 1965, THE CLOSING SUBMISSION TIME AS EXTENDED.
TECHNICAL EVALUATION OF THE PROPOSALS WAS CONDUCTED FROM JUNE 16, 1965,
THROUGH JUNE 18, 1965. THE PROPOSALS OF EIGHT COMPANIES WERE FOUND TO
BE UNACCEPTABLE. THREE PROPOSALS, ALTHOUGH FOUND TO BE TECHNICALLY
QUALIFIED WERE FOUND TO BE UNACCEPTABLE AS TO PRICE, BASED ON A MAXIMUM
ESTABLISHED PRICE OF $80,000.
YOUR BID OF $69,904, RATED SECOND AS TO TECHNICAL PRIORITY, WAS FOUND
TO BE SIXTH LOW. THE BID OF TECHNICAL SERVICES CORPORATION IN THE
AMOUNT OF $42,708.16, RATED FIFTH AS TO TECHNICAL PRIORITY, RANKED FIRST
AS TO PRICE.
IT HAS BEEN REPORTED THAT ON JUNE 23, 1965, DUE TO THE URGENCY OF THE
REQUIREMENT, TELEPHONE NEGOTIATIONS WERE CONDUCTED WITH THE NINE BIDDERS
WITHIN THE ESTABLISHED PRICE RANGE WHO WERE RATED AS TECHNICALLY
QUALIFIED; THAT THESE COMPANIES WERE REQUESTED TO REVIEW THEIR
PROPOSALS AND SUBMIT THEIR FINAL ESTIMATED COSTS BY JUNE 25, 1965; THAT
SUGGESTED AREAS WHERE REVISIONS MIGHT BE MADE IN YOUR PROPOSAL WERE
LABOR AND BURDEN COSTS; THAT ALL BIDDERS WERE INSTRUCTED HOWEVER, THAT
ANY REVISIONS WERE TO BE ACCOMPLISHED WITHOUT CHANGING THE LEVEL OF
EFFORT; THAT NEGOTIATIONS WERE CONCLUDED JUNE 25, 1965; AND THAT THE
LOW TECHNICAL QUALIFIED PROPOSAL WAS SUBMITTED BY TECHNICAL SERVICES
CORPORATION WHICH OFFERED TO ACCEPT A FIXED-PRICE CONTRACT AT
$42,708.16, PLUS AN ESTIMATED $4,000 FOR ACTUAL ALLOWABLE TRAVEL COSTS.
AS TO THE NEGOTIATIONS CONDUCTED WITH ELCOM IT HAS BEEN REPORTED THAT
ON JUNE 23, 1965, YOUR MR. HAMILTON SEELEY WAS ADVISED BY TELEPHONE THAT
AN EFFORT WAS BEING MADE TO NEGOTIATE A FINAL OFFER; THAT BY LETTER AND
TELETYPE BOTH DATED JUNE 23, 1965, ELCOM ADVISED THAT IT WOULD REDUCE
ALL DIRECT LABOR COSTS, AS SET FORTH IN ITS PROPOSAL BY TEN PERCENT;
THAT SINCE THIS NEGOTIATION WAS SPECIFIED AS A FINAL OFFER AND THE
REDUCTION WAS NOT WITHIN RANGE OF THE LOW BID, NEGOTIATIONS
WITH ELCOM WERE CONCLUDED; AND THAT SINCE TECHNICAL SERVICES
CORPORATION WAS DEEMED TO HAVE SUBMITTED THE PROPOSAL MOST ADVANTAGEOUS
TO THE GOVERNMENT, AWARD WAS MADE TO THAT BIDDER AFTER IT HAD BEEN
DETERMINED TO BE A RESPONSIBLE BIDDER PURSUANT TO THE REQUIREMENT OF THE
ARMED SERVICES PROCUREMENT REGULATION, SECTION 1-903.
YOUR LETTER OF JULY 14, 1965, TO THE CONTRACTING OFFICER INDICATES
THAT YOUR PROTEST IS BASED PRIMARILY ON TWO CONTENTIONS, NAMELY, (1)
ELCOM WAS ASSURED BY RESPONSIBLE PERSONS (MR. HARRING, LIEUTENANT
COLONEL THORNTON, COLONEL BENJAMIN, MR. C. O. DILL, MR. W. A. CHANCE,
AND MR. J. GRAHAM) THAT IT WOULD BE AWARDED THE CONTRACT ON A
SOLE-SOURCE BASIS WHICH ASSURANCE RESULTED IN THE EXPENDITURE OF
CONSIDERABLE TIME AND MONEY IN THE PREPARATION OF A PROPOSAL SUBMITTED
BY ELCOM PRIOR TO THE ISSUANCE OF THE RFP AND (2) THAT ELCOM FEELS THAT
THE SHORT LEAD TIME ALLOWED BY THE RFP (JUNE 1, 1965, TO JUNE 15, 1965)
PRECLUDED ALL OTHER COMPANIES FROM PLANNING, ANALYZING IN DEPTH, MANNING
AND SUBMITTING A MEANINGFUL PROPOSAL FOR THE PROGRAM.
AS TO YOUR FIRST CONTENTION, IT HAS BEEN REPORTED THAT AN
INVESTIGATION DISCLOSED THAT WHILE ELCOM HAD BEEN FURNISHED CERTAIN
INFORMATION ABOUT TAERS AND HAD BEEN ALLOWED TO VISIT CERTAIN GOVERNMENT
INSTALLATIONS TO STUDY VARIOUS ASPECTS OF TAERS, THESE CONCESSIONS WERE
MADE TO ELCOM AT ITS REQUEST; THAT SUCH CONCESSIONS DEFINITELY WERE NOT
MADE AT THE REQUEST OF THE GOVERNMENT; THAT EACH INDIVIDUAL NAMED IN
YOUR LETTER OF JULY 14, 1965, AS THE SOURCE OF ADVICE THAT YOUR COMPANY
WOULD BE APPROVED AS SOLE-SOURCE CONTRACTOR HAS ASSERTED, IN EFFECT,
THAT THE ORIGINAL PROPOSAL SUBMITTED BY YOU WAS UNSOLICITED; THAT NO
ASSURANCE COULD BE MADE REGARDING THE AWARD OF A CONTRACT, SINCE THIS
WAS THE SOLE RESPONSIBILITY OF THE CONTRACTING OFFICER; AND THAT NO
STATEMENT WAS MADE THAT YOUR PROPOSAL WOULD BE HANDLED FOR CONTRACT
PURPOSES AS A SOLE-SOURCE BASIS. IN THIS REGARD, COLONEL BENJAMIN IN A
SIGNED STATEMENT DATED AUGUST 20, 1965, REFERRING TO TELEPHONE
CONVERSATIONS WITH YOUR REPRESENTATIVES STATED THAT HE MADE IT A
SPECIFIC POINT IN NEARLY EVERY CONVERSATION THAT THERE WAS NO ASSURANCE
THAT THE CONTRACT WOULD BE CONSUMMATED AND THAT IF CONSUMMATED IT COULD
GO TO OTHER CONTRACTORS. IN A SIGNED STATEMENT DATED AUGUST 6, 1965,
LIEUTENANT COLONEL THORNTON STATED THAT THE MATTER OF SUBMITTING A
PROPOSAL WAS DISCUSSED WITH YOUR REPRESENTATIVES; THAT WHILE HE POSED
NO OBJECTION THERETO, HE SUGGESTED THAT INASMUCH AS THE ARMY MAINTENANCE
BOARD, THE PRINCIPAL PROPONENT OF TAERS, WAS THEN ENGAGED IN A TAERS
EVALUATION STUDY, SUCH A PROPOSAL MIGHT BE USED AS PART OF A FINAL
EVALUATION BY THE BOARD. COLONEL THORNTON SPECIFICALLY STATED HOWEVER,
THAT "I DID NOT STATE THAT THE PROPOSAL WOULD BE HANDLED AS THE SOLE
SOURCE FOR CONTRACT PURPOSES.'
IN A STATEMENT DATED AUGUST 10, 1965, MR. MICHAEL G. HARRING,
TECHNICAL DIRECTOR, MAINTENANCE READINESS DIVISION, IN REFERRING TO
CONVERSATIONS WITH YOUR MR. CAWOOD AND MR. HAGERMAN STATED THAT THEY
"WERE REPEATEDLY INFORMED THAT IF THE ARMY DECIDED TO OBTAIN OUTSIDE
ASSISTANCE ON PROJECT TAERS THAT IT WOULD BE REQUIRED BY REGULATION TO
BE ADVERTISED FOR BIDS.'
IN ANOTHER SIGNED STATEMENT DATED AUGUST 20, 1965, MR. CHARLES D.
DILL, CHIEF, USAMB LIAISON OFFICE, IN REFERRING TO CONVERSATIONS WITH
YOUR MR. CAWOOD AND MR. HAGERMAN STATED THAT "AT NO TIME DID I SUGGEST
OR INFER THE POSSIBILITY OF A SOLE SOURCE CONTRACT WITH ELCOM NOR DID I
AT ANY TIME LEND ANY ENCOURAGEMENT TO THEIR PROPOSAL THAT THEY BE
CONSIDERED AS A SOLE SOURCE FOR THIS SERVICE" AND THAT "I, ALSO, ADVISED
THESE MEN THAT THE DETERMINATION AS TO OBTAINING A CONTRACT WOULD HAVE
TO BE MADE BY A CONTRACTING OFFICER.'
IN A SIGNED STATEMENT DATED AUGUST 11, 1965, MR. JAMES GRAHAM, JR.,
SPECIAL PROJECTS OFFICER, UNITED STATES ARMY MAINTENANCE BOARD, IN
REFERRING TO DISCUSSIONS EARLY IN JANUARY 1965 WITH YOUR MR. HAGERMAN
STATED THAT "AT NO TIME WAS MR. HAGERMAN TOLD THAT ELCOM WOULD BE
REQUESTED TO PERFORM THE STUDY ON A SOLE SOURCE BASIS," BUT THAT "MR.
HAGERMAN WAS INFORMED THAT THE USAMB WOULD RECOMMEND TO USASMC THAT SUCH
A STUDY BE PERFORMED AND THAT ELCOM COULD BE LISTED AS A SUGGESTED
SOURCE.'
MR. WAYNE A. CHANCE, SPECIAL PROJECTS OFFICER, IN A WRITTEN STATEMENT
DATED AUGUST 6, 1965, STATED THAT WHILE ON OR ABOUT FEBRUARY 22, 1965,
HE HAD BEEN INTRODUCED TO A REPRESENTATIVE OF ELCOM HE HAD NO DISCUSSION
WITH ELCOM CONCERNING THIS CONTRACT OR ANY OTHER PROJECT OR CONTRACT.
THE FOREGOING STATEMENTS ARE IN DIRECT CONFLICT WITH YOUR STATEMENTS
CONCERNING EXPENDITURES MADE BY YOU INCIDENT TO SENDING YOUR PERSONNEL
TO LEXINGTON AND FORT KNOX AT THE REQUEST OF USASMC AND UNITED STATES
ARMY MAINTENANCE PERSONNEL AND THE AWARD OF A CONTRACT TO YOUR CONCERN
ON A SOLE-SOURCE BASIS. IN THIS REGARD, WE HAVE CONSISTENTLY HELD THAT
WHERE THERE ARE DISPUTED QUESTIONS OF FACT, IN THE ABSENCE OF EVIDENCE
SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS
OF THE ADMINISTRATIVE REPORT, THIS OFFICE WILL ACCEPT THE ADMINISTRATIVE
REPORT AS ACCURATELY REFLECTING THE DISPUTED FACTS. 37 COMP. GEN. 568;
41 ID. 47; ID. 266; 42 ID. 124, 134. SEE, ALSO, ON THIS POINT
LONGWILL V. UNITED STATES, 17 CT.CL. 288 AND CHARLES V. UNITED STATES,
19 CT.CL. 316. INASMUCH AS YOUR STATEMENTS AND CONTENTIONS WITH RESPECT
TO THE FOREGOING MATTERS ARE UNSUPPORTED BY ANY EVIDENCE WE FEEL THAT
THE PRESUMPTION IN FAVOR OF THE FACTS AS ADMINISTRATIVELY REPORTED HAS
NOT BEEN OVERCOME. FURTHERMORE, WE BELIEVE IT WOULD HAVE BEEN IMPROPER
FOR ANY OF SUCH OFFICIALS TO HAVE GIVEN YOU ANY "SOLE-SOURCE" ASSURANCE.
AS TO YOUR SECOND CONTENTION IT HAS BEEN REPORTED THAT YOUR COMPANY'S
REPRESENTATIVE ATTENDED THE PROPOSAL BRIEFING AT WHICH TIME ALL
INTERESTED COMPANIES WERE ADVISED OF THE URGENCY IN GETTING THE STUDY
UNDER WAY. ELCOM, OF COURSE, WAS MADE AWARE OF SUCH URGENCY BY THE
SHORT DEADLINE ALLOWED FOR SUBMISSION OF PROPOSALS; IN ADDITION ELCOM
SHOULD HAVE KNOWN THAT A LARGE NUMBER OF COMPANIES WOULD PROBABLY BE
INTERESTED IN SECURING THE CONTRACT BECAUSE OF THE LARGE NUMBER OF
COMPANY REPRESENTATIVES PRESENT AT THE PROPOSAL BRIEFING; AND
THEREFORE, ELCOM SHOULD HAVE SUBMITTED ITS BEST PROPOSAL INITIALLY
WITHOUT EXPECTING A LOT OF NEGOTIATING ON PRICE AND OTHER CONDITIONS.
IN THIS REGARD THE RFP PROVIDED THAT:
"AWARD MAY BE MADE WITHOUT DISCUSSION OF PROPOSALS RECEIVED;
THEREFORE OFFEROR'S ARE CAUTIONED 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.'
AS TO YOUR COMPLAINT CONCERNING THE NEGOTIATIONS BY TELEPHONE IT WAS
STATED IN 38 COMP. GEN. 861, 863, THAT:
"* * * WE ARE UNAWARE OF ANY REQUIREMENT, WHETHER BY STATUTE,
REGULATION, OR OTHERWISE, WHICH WOULD IMPOSE UPON THE CONTRACTING
OFFICER THE DUTY OF CONDUCTING NEGOTIATIONS IN PERSON ACROSS A TABLE
FROM THE PROSPECTIVE CONTRACTOR.'
THE CONTRACTING OFFICER'S DUTY IN CONDUCTING NEGOTIATIONS IS TO
OBTAIN THE BEST CONTRACT FOR THE UNITED STATES AND THERE IS NO
INDICATION THAT THE CONTRACTING OFFICER FAILED TO GIVE ANY OF THE
BIDDERS REASONABLE OPPORTUNITY TO SUBMIT THEIR BEST PROPOSAL.
AFTER CAREFUL CONSIDERATION OF YOUR CONTENTIONS AND THE
ADMINISTRATIVE REPORTS IN THIS MATTER, WE FIND NO ERROR IN THE
PROCUREMENT PROCEDURES. THE PROCUREMENT WAS IN ACCORD WITH THE
REGULATIONS CONCERNED IN NEGOTIATED CONTRACT MATTERS AND THE
DETERMINATION TO NEGOTIATE IS FINAL.
B-157707, NOV. 8, 1965
TO LIEUTENANT COLONEL H. W. KASSERMAN, FC, FINANCE AND ACCOUNTING
OFFICER, DEPARTMENT OF THE ARMY:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 23, 1965,
REQUESTING AN ADVANCE DECISION AS TO WHETHER PAYMENT MAY BE PROPERLY
MADE OF A VOUCHER IN THE AMOUNT OF $62, REPRESENTING THE MONTHLY COST OF
AN ELECTION MADE BY LIEUTENANT COLONEL J. ALLINGTON BRIDGMAN, 0 81 965,
U.S. ARMY, RETIRED, UNDER THE RETIRED SERVICEMAN'S FAMILY PROTECTION
PLAN AND WITHHELD FROM HIS RETIRED PAY FOR THE PERIOD MARCH 1, 1965,
THROUGH JULY 31, 1965, AND WHETHER COST DEDUCTIONS FROM HIS RETIREMENT
PAY MAY BE DISCONTINUED.
COLONEL BRIDGMAN ELECTED TO PARTICIPATE IN THE RETIRED SERVICEMAN'S
FAMILY PROTECTION PLAN TO PROVIDE AN ANNUITY AT THE RATE OF ONE-FOURTH
OF HIS REDUCED RETIRED PAY FOR HIS WIFE, INCLUDING AN OPTION FOR
TERMINATING RETIRED PAY DEDUCTIONS IN THE EVENT NO BENEFICIARY WOULD BE
ELIGIBLE FOR THE ANNUITY UPON HIS DEATH. THAT ELECTION WAS MADE ON
BEHALF OF CONNIE MCKIM BRIDGMAN, WHO WAS HIS WIFE AT THE TIME HE MADE
THE ELECTION AND AT THE TIME OF HIS RETIREMENT. AS A RESULT OF A
DIVORCE DECREE GRANTED THIS OFFICER ON FEBRUARY 9, 1965, BY THE SEOUL
FAMILY COURT, SEOUL, REPUBLIC OF KOREA, IT IS CLAIMED BY HIM THAT SHE IS
NO LONGER AN ELIGIBLE BENEFICIARY. IT IS REPORTED THAT HE WAS SERVING
ON DUTY IN KOREA AT THE TIME OF HIS RETIREMENT ON OCTOBER 1, 1962; THAT
HE CONTINUED TO LIVE IN THAT COUNTRY FOLLOWING HIS RETIREMENT; AND THAT
HIS WIFE DID NOT JOIN HIM IN KOREA BUT CONTINUED TO LIVE IN CALIFORNIA
AFTER HIS RETIREMENT. HE WAS BORN IN BINGHAMTON, NEW YORK.
RELEVANT TO DIVORCE DECREES GRANTED IN FOREIGN COUNTRIES THE GENERAL
RULE IS WELL SETTLED AS STATED IN 143 ALR 1312 WHICH READS IN PERTINENT
PART AS FOLLOWS:
"* * * SINCE THE FULL FAITH AND CREDIT PROVISION DOES NOT APPLY TO
JUDGMENTS AND DECREES OF FOREIGN COUNTRIES, THE ONLY BASIS UPON WHICH
RECOGNITION MAY BE EXTENDED TO FOREIGN DECREES OF DIVORCE IS THE RULE OF
INTERNATIONAL COMITY. BUT HERE TOO, THE WELL-SETTLED PRINCIPLE IS THAT
UNLESS THE FOREIGN COURT HAD JURISDICTION OVER THE SUBJECT MATTER OF THE
DIVORCE, BY REASON OF BONA FIDE RESIDENCE OR DOMICILE THERE OF AT LEAST
ONE OF THE PARTIES, ITS DECREE OF DIVORCE WILL NOT, UNDER THE RULES OF
COMITY, BE RECOGNIZED IN ONE OF THE STATES OF THE UNITED STATES; AND
THIS, IT SEEMS, ALTHOUGH THE LAWS OF SUCH FOREIGN COUNTRY DO NOT MAKE
RESIDENCE OR DOMICILE A CONDITION OF ITS COURT'S JURISDICTION.'
A QUESTION ARISES AS TO WHETHER COLONEL BRIDGMAN WAS ACTUALLY
DOMICILED IN KOREA SINCE THE KOREAN DIVORCE DECREE LISTS A NEW YORK
ADDRESS AS HIS "PERMANENT ADDRESS.' IT APPEARS TO BE WELL ESTABLISHED
THAT WHERE JURISDICTION TO CONSIDER A DIVORCE ACTION IS BASED ON A
PERSON'S RESIDENCE IN A PARTICULAR AREA, SUCH RESIDENCE MUST BE ACTUAL
AND GENUINE AND ACCOMPANIED BY AN INTENT TO MAKE THAT PLACE HIS HOME.
SEE 27B C.J.S. 806, NOTES 1 AND 2 AND CASES THERE CITED. BY INFORMING
THE COURT OF HIS PERMANENT ADDRESS IN NEW YORK, THE PLAINTIFF TOOK A
POSITION WHICH WAS NOT CONSISTENT WITH AN INTENTION TO MAKE KOREA HIS
HOME AND SUCH ACTION ON HIS PART RAISES A SUBSTANTIAL DOUBT AS TO
WHETHER THE KOREAN COURT OBTAINED JURISDICTION OVER THE SUBJECT MATTER
OF THE DIVORCE SUIT.
IN THE RECENT CASE OF ROSENSTIEL V. ROSENSTIEL, 262 N.Y.S.2D, 86
(1965), THE NEW YORK COURT OF APPEALS HELD THAT WHERE THE PLAINTIFF
PERSONALLY APPEARED BEFORE A FOREIGN COURT AND THE DEFENDANT APPEARED BY
AN ATTORNEY, THAT COURT ACQUIRED JURISDICTION "OVER THE MARRIAGE AS A
LEGAL ENTITY" AND THAT RECOGNITION OF THE FOREIGN "BILATERAL DIVORCE"
THUS VALIDLY OBTAINED "OFFENDS NO PUBLIC POLICY OF THIS STATE.' SINCE
THE NEW YORK COURT STRESSED THE BILATERAL NATURE OF THE DIVORCE ACTION,
THERE IS A CLEAR INDICATION THAT SUCH RECOGNITION WOULD BE WITHHELD
WHERE A UNILATERAL OR EX PARTE DIVORCE IS GRANTED BY A FOREIGN COURT
HAVING NO PERSONA JURISDICTION OVER THE DEFENDANT.
THE GENERAL RULE REGARDING THE NECESSITY FOR DUE PROCESS AS
APPLICABLE TO A DECREE OF A FOREIGN COUNTRY HAS BEEN STATED AS FOLLOWS:
"A CONSTRUCTIVE SERVICE OF PROCESS ON A NON-RESIDENT DEFENDANT IN
ACCORD WITH THE LAWS OF THE COUNTRY OR STATE IN WHICH THE DIVORCE IS
GRANTED IS SUFFICIENT AS A SERVICE OF PROCESS TO ENTITLE THE FOREIGN
DIVORCE TO RECOGNITION BY COMITY, WHERE THE COURT HAS JURISDICTION OF
THE CAUSE AND THE DEFENDANT ACTUALLY RECEIVED TIMELY NOTICE OF THE
PENDENCY OF THE ACTION.' 17A AM.JUR. DIVORCE AND SEPARATION, SEC. 963.
(SEE ALSO 27B C.J.S. DIVORCE, SEC. 344.)
IT DOES NOT APPEAR EITHER WITHIN THE DIVORCE DECREE ITSELF, OR
ELSEWHERE, THAT PROPER SERVICE OF PROCESS WAS MADE ON CONNIE MCKIM
BRIDGMAN OR THAT SHE RECEIVED ACTUAL NOTICE OF THE KOREAN DIVORCE
PROCEEDING.
IN VIEW OF THE DOUBT AS TO KOREAN COURT'S JURISDICTION OVER THE
DEFENDANT AND THE SUBJECT MATTER OF THE ACTION, IT IS BELIEVED THAT NO
ACTION SHOULD BE TAKEN TO REFUND THE AMOUNTS WITHHELD FROM COLONEL
BRIDGMAN'S RETIRED PAY UNTIL A COURT OF COMPETENT JURISDICTION IN THIS
COUNTRY HAS DETERMINED THE MARITAL STATUS OF THE PARTIES TO THE DIVORCE
PROCEEDINGS. PENDING SUCH ACTION, THE COST DEDUCTIONS SHOULD BE
CONTINUED. THE SUBMITTED VOUCHER IS BEING RETAINED HERE.
B-157729, NOV. 8, 1965
TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION:
BY LETTER DATED SEPTEMBER 17, 1965, THE ASSISTANT GENERAL COUNSEL,
REGULATIONS AND GENERAL LAW DIVISION, REQUESTED OUR COMMENTS ON PROPOSED
AMENDMENTS TO THE FEDERAL PROCUREMENT REGULATIONS AND THE FEDERAL
PROPERTY MANAGEMENT REGULATIONS. THESE AMENDMENTS WOULD MAKE POSSIBLE
AND FACILITATE THE USE OF MOTOR POOL VEHICLES BY COST-REIMBURSEMENT TYPE
CONTRACTORS AND SUBCONTRACTORS.
WE HAVE NO LEGAL BASIS FOR OBJECTION TO THE PROMULGATION OF THE
PROPOSED AMENDMENTS TO THE CITED REGULATIONS. WE ARE NOT CONVINCED,
HOWEVER, THAT SUBPART 1-5.502 (A) (4) OF THE PROPOSED REGULATIONS
REQUIRING THAT CONTRACTORS AND SUBCONTRACTORS PROVIDE SUITABLE
INDEMNIFICATION TO PROTECT THE GOVERNMENT AGAINST LOSS OR DAMAGE TO
VEHICLES AND THIRD PARTY CLAIMS ARISING FROM A CONTRACTOR EMPLOYEE'S USE
OR OPERATION OF A MOTOR POOL VEHICLE IS IN THE BEST INTEREST OF THE
GOVERNMENT AS A WHOLE, BUT WE HAVE MADE NO COST STUDIES IN THIS AREA.
WE SUGGEST THAT CONSIDERATION BE GIVEN TO AMENDING FPMR 101-39.8 MAKING
THE CONTRACTING AGENCIES RESPONSIBLE FOR SUCH LOSSES IN THE SAME MANNER
THEY ARE RESPONSIBLE WHEN MOTOR POOL VEHICLES ARE OPERATED BY THEIR OWN
EMPLOYEES. THERE IS ALSO FOR CONSIDERATION WHETHER THE SELF-INSURANCE
POLICY OF THE FEDERAL GOVERNMENT SHOULD NOT BE APPLIED TO THESE RISKS,
ESPECIALLY WITH RESPECT TO THE LOSS OR DAMAGE TO THE VEHICLES. IN THIS
CONNECTION, SEE CLAUSE (G) ENTITLED "RISK OF LOSS" WHICH IS REQUIRED BY
SECTION 13.703 OF THE ARMED SERVICES PROCUREMENT REGULATIONS TO BE
INCLUDED IN DEPARTMENT OF DEFENSE COST-REIMBURSED CONTRACTS WHEN THE
CONTRACTOR USES GOVERNMENT-FURNISHED
B-157773, NOV. 8, 1965
TO MR. WALTER H. SPRAGUE:
THIS REFERS TO YOUR LETTER OF OCTOBER 21, 1965, IN EFFECT REQUESTING
RECONSIDERATION OF OUR DECISION OF OCTOBER 15, 1965, B-157773, TO YOU,
SUSTAINING THE DISALLOWANCE OF YOUR CLAIM FOR THE COST OF TRANSPORTATION
FROM RIVERSIDE, CALIFORNIA, TO NORTHEAST CAPE, ALASKA, AND RETURN,
INCIDENT TO YOUR EMPLOYMENT WITH THE DEPARTMENT OF THE AIR FORCE FROM
NOVEMBER 5, 1962, THROUGH MARCH 25, 1963.
THE FACTS IN YOUR CASE WERE FULLY SET FORTH IN OUR DECISION OF
OCTOBER 15, 1965, AND NEED NOT BE REPEATED HERE. YOUR CLAIM WAS
DISALLOWED BECAUSE YOU RESIGNED FROM YOUR POSITION PRIOR TO COMPLETION
OF THE ONE-YEAR AGREED PERIOD OF SERVICE.
THE TRANSPORTATION AGREEMENT SIGNED BY YOU STATES THAT THE TRAVEL AND
TRANSPORTATION OF EMPLOYEES APPOINTED TO POSITIONS OUTSIDE THE 48 STATES
AND THE DISTRICT OF COLUMBIA IS PROVIDED FOR BY SECTION 7, PUB.L. 600,
79TH CONGRESS. SECTION 7 OF THE ADMINISTRATIVE EXPENSES ACT OF 1946, AS
AMENDED, 5 U.S.C. 73B-3, READS IN PART AS FOLLOWS:
"/A) APPROPRIATIONS FOR THE DEPARTMENTS SHALL BE AVAILABLE, IN
ACCORDANCE WITH REGULATIONS PRESCRIBED BY THE PRESIDENT, FOR EXPENSES OF
TRAVEL OF NEW APPOINTEES, EXPENSES OF TRANSPORTATION OF THEIR IMMEDIATE
FAMILIES AND EXPENSES OF TRANSPORTATION OF THEIR HOUSEHOLD GOODS AND
PERSONAL EFFECTS FROM PLACES OF ACTUAL RESIDENCE AT TIME OF APPOINTMENT
TO PLACES OF EMPLOYMENT OUTSIDE CONTINENTAL UNITED STATES, AND FOR SUCH
EXPENSES ON RETURN OF EMPLOYEES FROM THEIR POSTS OF DUTY OUTSIDE
CONTINENTAL UNITED STATES TO THE PLACES OF THEIR ACTUAL RESIDENCE AT
TIME OF ASSIGNMENT TO DUTY OUTSIDE THE UNITED STATES: PROVIDED, THAT
SUCH EXPENSES OF TRAVEL AND TRANSPORTATION TO POSTS OF DUTY OUTSIDE THE
CONTINENTAL UNITED STATES SHALL NOT BE ALLOWED UNLESS AND UNTIL THE
PERSON SELECTED FOR APPOINTMENT SHALL AGREE IN WRITING TO REMAIN IN THE
GOVERNMENT SERVICE FOR TWELVE MONTHS FOLLOWING HIS APPOINTMENT UNLESS
SEPARATED FOR REASONS BEYOND HIS CONTROL AND ACCEPTABLE TO THE
DEPARTMENT OR AGENCY CONCERNED AND IN CASE OF VIOLATION OF SUCH
AGREEMENT ANY MONEYS EXPENDED BY THE UNITED STATES ON ACCOUNT OF SUCH
TRAVEL AND TRANSPORTATION SHALL BE RECOVERABLE FROM THE INDIVIDUAL
CONCERNED AS A DEBT DUE THE UNITED STATES * * *"
THE DEPARTMENT OF THE AIR FORCE DOES NOT CONSIDER THE REASON GIVEN BY
YOU (INADEQUATE LIVING CONDITIONS) FOR YOUR PREMATURE RESIGNATION AS
ACCEPTABLE BECAUSE IT WAS ADMINISTRATIVELY DETERMINED THAT THE LIVING
CONDITIONS AT NORTHEAST CAPE DURING THE TIME YOU WERE ASSIGNED THERE
WERE SATISFACTORY, AND THAT THEY COMPARED FAVORABLY WITH LIVING
CONDITIONS AT OTHER REMOTE AIR FORCE STATIONS.
UNDER THE STATUTE QUOTED ABOVE OUR OFFICE IS REQUIRED TO ACCEPT THE
DETERMINATION OF THE DEPARTMENT OF THE AIR FORCE IN THE MATTER.
THEREFORE, THE PRIOR ACTION IN DISALLOWING YOUR CLAIM IS AGAIN
SUSTAINED.
AS REQUESTED BY YOU THERE ARE RETURNED HEREWITH THE PAPERS FORWARDED
TO OUR OFFICE BY THE DEPARTMENT OF THE AIR FORCE IN SUPPORT OF YOUR
CLAIM.
B-157885, NOV. 8, 1965
TO THE HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION:
YOUR LETTER OF OCTOBER 19, 1965, CONCERNS A CONTRACT DATED NOVEMBER
13, 1963, WHEREBY THE UNITED STATES, ACTING BY AND THROUGH THE
ADMINISTRATOR OF GENERAL SERVICES, AGREED TO SELL, AND THE BOARD OF
PUBLIC INSTRUCTION OF BROWARD COUNTY (BOARD), FORT LAUDERDALE, FLORIDA,
AGREED TO PURCHASE, 125 ACRES OF LAND AT A PRICE OF $375,000.
YOUR LETTER DISCLOSES THAT THE BOARD HAS PAID $120,000 AND 34 ACRES
HAVE ALREADY BEEN CONVEYED; AND THAT TITLE TO THE REMAINING 91 ACRES IS
STILL IN THE UNITED STATES AND $255,000 OF THE PURCHASE PRICE REMAINS
UNPAID. YOU ADVISE THAT UNDER THE CONTRACT 34 QUARTERLY PAYMENTS OF
$7,500 EACH, PLUS INTEREST, REMAIN TO BE MADE, BEGINNING WITH THE
PAYMENT DUE AUGUST 13, 1965, WHICH HAS BEEN DEFERRED PENDING OUR
CONSIDERATION OF THE QUESTION PRESENTED IN YOUR LETTER. YOU STATE THAT
UPON THE MAKING OF EACH SUCH QUARTERLY PAYMENT, TWO ACRES ARE TO BE
CONVEYED TO THE BOARD.
YOU REPORT THAT THE MONEY FOR THE PAYMENTS MADE TO DATE HAS BEEN
FURNISHED TO THE BOARD BY THE NOVA UNIVERSITY OF ADVANCED TECHNOLOGY, A
PRIVATE, NONPROFIT UNIVERSITY, AND THAT THE 34 ACRES SO FAR CONVEYED TO
THE BOARD HAVE BEEN RECONVEYED BY THE BOARD TO NOVA UNIVERSITY. YOUR
LETTER DISCLOSES THAT NOVA UNIVERSITY IS PART OF AN EDUCATIONAL COMPLEX
REFERRED TO AS THE SOUTH FLORIDA EDUCATION CENTER; THAT THE CAMPUS OF
THE CENTER INCLUDES PUBLIC SCHOOLS FROM THE PRESCHOOL LEVEL THROUGH A
JUNIOR COLLEGE, BUILT OR TO BE BUILT BY THE BOARD OF PUBLIC INSTRUCTION
OF BROWARD COUNTY, AND A UNIVERSITY TO BE CONSTRUCTED BY NOVA
UNIVERSITY.
YOU STATE THAT NOVA UNIVERSITY REQUIRES THE 91 ACRES WHICH HAVE NOT
YET BEEN CONVEYED UNDER THE CONTRACT OF SALE WITH THE BOARD. IT HAS
BEEN PROPOSED THAT GENERAL SERVICES ADMINISTRATION (GSA) AGREE WITH THE
BOARD TO CANCEL, AT NO COST TO EITHER PARTY, THE CONTRACT OF SALE WITH
RESPECT TO THE REMAINING 91 ACRES AND THE UNPAID PURCHASE PRICE OF
$255,000, AND THAT THEREUPON THE 91 ACRES BE ASSIGNED BY GSA TO THE
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) FOR CONVEYANCE TO
NOVA UNIVERSITY AT A PUBLIC BENEFIT ALLOWANCE PURSUANT TO SECTION 203
(K) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS
AMENDED, 40 U.S.C. 484 (K).
YOU, IN EFFECT, REQUEST A DECISION AS TO WHETHER WE WOULD INTERPOSE
ANY OBJECTION TO THE CANCELLATION OF THE CONTRACT BETWEEN GSA AND THE
BOARD WITH RESPECT TO THE 91 ACRES SO THAT THE PROPERTY MAY BE ASSIGNED
TO HEW FOR CONVEYANCE BY SUCH AGENCY TO THE BOARD UNDER THE APPLICABLE
PROVISIONS OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF
1949, AS AMENDED.
AS INDICATED IN YOUR LETTER, WE HELD IN 40 COMP. GEN. 455, THAT
CERTAIN PROPERTY COULD BE CONVEYED TO THE VALLEJO UNIFIED SCHOOL
DISTRICT AT A PUBLIC BENEFIT ALLOWANCE PURSUANT TO SECTION 203 (K) OF
THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS
AMENDED, EVEN THOUGH THE DISTRICT HAD ENTERED INTO A CONTRACT TO
PURCHASE THE PROPERTY FROM THE GOVERNMENT. WE REITERATED THEREIN THAT
THE PRINCIPLE THAT NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE
AWAY OR SURRENDER A VESTED RIGHT OR MODIFY THE TERMS OF A CONTRACT IF
SUCH ACTION IS PREJUDICIAL TO THE UNITED STATES WAS NOT FOR APPLICATION
WHERE STATUTORY AUTHORITY EXISTS FOR THE TRANSFER OF PROPERTY WITHOUT
COMPENSATION AND THE APPROPRIATE DETERMINATION REQUIRED (BY THE STATUTE)
TO MAKE SUCH TRANSFER HAS BEEN MADE. SEE B-81135, DECEMBER 15, 1948.
SECTION 203 (K) (1) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE
SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484 (K) (1), PROVIDES, IN
PERTINENT PART, AS FOLLOWS:
"/1) UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE, THE ADMINISTRATOR IS
AUTHORIZED, IN HIS DISCRETION, TO ASSIGN TO THE SECRETARY OF HEALTH,
EDUCATION, AND WELFARE FOR DISPOSAL SUCH SURPLUS REAL PROPERTY,
INCLUDING BUILDINGS, FIXTURES, AND EQUIPMENT SITUATED THEREON, AS IS
RECOMMENDED BY THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE AS BEING
NEEDED FOR SCHOOL, CLASSROOM, OR OTHER EDUCATIONAL USE, OR FOR USE IN
THE PROTECTION OF PUBLIC HEALTH, INCLUDING RESEARCH.
"/A) SUBJECT TO THE DISAPPROVAL OF THE ADMINISTRATOR WITHIN THIRTY
DAYS AFTER NOTICE TO HIM BY THE SECRETARY OF HEALTH, EDUCATION, AND
WELFARE OF A PROPOSED TRANSFER OF PROPERTY FOR SCHOOL, CLASSROOM, OR
OTHER EDUCATIONAL USE, THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE,
THROUGH SUCH OFFICERS OR EMPLOYEES OF THE DEPARTMENT OF HEALTH,
EDUCATION, AND WELFARE AS HE MAY DESIGNATE, MAY SELL OR LEASE SUCH REAL
PROPERTY, INCLUDING BUILDINGS, FIXTURES, AND EQUIPMENT SITUATED THEREON,
FOR EDUCATIONAL PURPOSES TO THE STATES AND THEIR POLITICAL SUBDIVISIONS
AND INSTRUMENTALITIES, AND TAX-SUPPORTED EDUCATIONAL INSTITUTIONS, AND
TO OTHER NONPROFIT EDUCATIONAL INSTITUTIONS WHICH HAVE BEEN HELD EXEMPT
FROM TAXATION UNDER SECTION 101 (6) OF TITLE 26.
"/C) IN FIXING THE SALE OR LEASE VALUE OF PROPERTY TO BE DISPOSED OF
UNDER SUBPARAGRAPH (A) AND SUBPARAGRAPH (B) OF THIS PARAGRAPH, THE
SECRETARY OF HEALTH, EDUCATION, AND WELFARE SHALL TAKE INTO
CONSIDERATION ANY BENEFIT WHICH HAS ACCRUED OR MAY ACCRUE TO THE UNITED
STATES FROM THE USE OF SUCH PROPERTY BY ANY SUCH STATE, POLITICAL
SUBDIVISION, INSTRUMENTALITY, OR INSTITUTION.'
IT IS CLEAR FROM THE QUOTED PROVISIONS OF LAW THAT STATUTORY
AUTHORITY EXISTS FOR THE SECRETARY OF HEW TO CONVEY SURPLUS REAL
PROPERTY TO CERTAIN NONPROFIT EDUCATIONAL INSTITUTIONS, SUBJECT TO THE
DISAPPROVAL OF THE ADMINISTRATOR OF GENERAL SERVICES. AS WAS THE CASE
IN 40 COMP. GEN. 445, THE DEED TO THE 91 ACRES IN THE INSTANT CASE HAS
NOT BEEN DELIVERED BY GSA TO THE BOARD NOR HAS THE PURCHASE PRICE BEEN
PAID BY THE BOARD FOR THIS PORTION OF THE LAND. THUS, TITLE TO THE 91
ACRES IS STILL IN THE UNITED STATES. WHILE IN THE INSTANT CASE THE
CONTRACT PURCHASER (THE BOARD) MAY NOT BE ELIGIBLE FOR A PUBLIC BENEFIT
TRANSFER UNDER SECTION 203 (K) (1) FOR UNIVERSITY PURPOSES, YOU ADVISE
THAT NOVA UNIVERSITY IS ELIGIBLE AND THAT THE TRANSFER WOULD BE MADE BY
HEW TO THE UNIVERSITY. MOREOVER, WE UNDERSTAND THAT IF THE CONTRACT
PURCHASER ACQUIRED THE 91 ACRES IT WOULD CONVEY THE 91 ACRES TO THE
UNIVERSITY AND THE UNIVERSITY WOULD PAY THE CONTRACT PURCHASER THE
ACQUISITION COST OF THE PROPERTY.
IN LIGHT OF ALL THE FACTS AND CIRCUMSTANCES WE WOULD INTERPOSE NO
OBJECTION IN THE INSTANT CASE TO GSA AGREEING WITH THE BOARD TO CANCEL,
AT NO COST TO EITHER PARTY, THE CONTRACT OF SALE BETWEEN GSA AND THE
BOARD WITH RESPECT TO THE REMAINING 91 ACRES AND THE UNPAID PURCHASE
PRICE OF $255,000, SO THAT THE LAND MAY BE ASSIGNED TO HEW FOR
CONVEYANCE BY SUCH AGENCY TO NOVA UNIVERSITY UNDER THE APPLICABLE
PROVISION OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF
1949, AS AMENDED.
B-102622, NOV. 5, 1965
TO MR. RALPH W. PYLES:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14, 1965, IN WHICH YOU
ADVISE THAT YOU RECEIVED A COPY OF OUR LETTER OF OCTOBER 7, 1965,
B-102622, TO CONGRESSMAN LENNON REGARDING A DECISION BY OUR OFFICE
PROHIBITING THE USE OF FEDERAL FUNDS LOANED UNDER TITLE IV OF THE
HOUSING ACT OF 1950 FOR THE PURCHASE OF FURNITURE UNLESS IT IS ACTUALLY
PART OF THE CONSTRUCTION OF THE FACILITY. YOU BELIEVE THAT BUILT-IN
FURNITURE IS GOING TO BE MORE EXPENSIVE THAN FACTORY BUILT FURNITURE,
AND TRUST THAT IN THE LIGHT OF INFORMATION OBTAINED FROM FURTHER
INVESTIGATION OF THE MATTER WE WILL RECONSIDER OUR DECISION.
REGARDING THE MATTER OF THE COST OF BUILT-IN FURNITURE AS COMPARED TO
THE COST OF FACTORY BUILT FURNITURE, WE WILL TAKE PARTICULAR NOTE OF
THIS MATTER IN OUR FUTURE AUDITS OF THE COLLEGE HOUSING
PROGRAM. HOWEVER, AS YOU WILL NOTE FROM THE ATTACHED COPY OF OUR
DECISION OF MAY 11, 1951, THE CONCLUSION THEREIN WAS BASED UPON THE
WORDING OF TITLE IV OF THE HOUSING ACT OF 1950, WHICH AUTHORIZED LOANS
ONLY FOR "CONSTRUCTION," AND THE DEFINITIONS OF "CONSTRUCTION,"
"HOUSING," AND ,DEVELOPMENT COSTS" CONTAINED THEREIN. THEREFORE, AS WE
ADVISED CONGRESSMAN LENNON, IN THE ABSENCE OF A CHANGE IN THE LAW, THERE
IS NO VALID BASIS FOR CHANGING OUR DECISION.
B-156927, NOV. 5, 1965
TO FISHER, SHARLITT, GELBAND AND GREEN:
REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 13, 1965, REINSTATING
THE PROTEST BY CAN ORA FARM, 342 MADISON AVENUE, NEW YORK, NEW YORK,
REGARDING THE AWARD OF CONTRACT NO. AF 61 (3081-1725 TO UNITED DAIRY
EQUIPMENT COMPANY, WEST CHESTER, PENNSYLVANIA, UNDER REQUEST FOR
PROPOSALS NO. 65-SUP-1, WHICH AWARD WAS PREDICATED UPON A NEGATIVE
FACILITY CAPABILITY REPORT ON CAN ORA FARM. THE REQUEST WAS ISSUED BY
THE BASE PROCUREMENT OFFICE, TORREJON AIR BASE, SPAIN, ON FEBRUARY 23,
1965, FOR PROPOSALS TO SUPPLY DAIRY PRODUCTS IN ACCORDANCE WITH
SPECIFICATIONS CONTAINED THEREIN. THE ONLY PROPOSAL RECEIVED BY THE DUE
DATE OF MARCH 24, 1965, WAS FROM THE INCUMBENT CONTRACTOR, HOWEVER, CAN
ORA FARM'S LATE PROPOSAL WAS CONSIDERED BECAUSE THE DELAY WAS IN THE
MAIL, FOR WHICH THE BIDDER COULD NOT BE HELD RESPONSIBLE.
THE CAN ORA FARM PROPOSAL WAS THE LOW BID AND ON ITS FACE APPEARED
RESPONSIVE, BUT TO DETERMINE THE BIDDERS "RESPONSIBILITY" EVIDENCE OF
SOMETHING MORE THAN PECUNIARY ABILITY WAS NECESSARY. THE IMPORT OF THIS
PROCUREMENT REQUIRED CONSIDERATION NOT ONLY OF THE BIDDER'S FINANCIAL
RESOURCES BUT ALSO ITS JUDGMENT, SKILL, INTEGRITY AND ABILITY TO
SUCCESSFULLY FULFILL THE STRINGENT REQUIREMENTS OF THE CONTRACT.
ACCORDINGLY, A TEAM OF QUALIFIED PERSONNEL FROM THE AIR FORCE NEW
YORK CONTRACT MANAGEMENT DISTRICT AND THE BASE PROCUREMENT OFFICE,
TORREJON AIR BASE, MADE A PRE-AWARD FACILITY CAPABILITY INSPECTION OF
CAN ORA FARM WHICH RESULTED IN A NEGATIVE REPORT ISSUED MAY 13, 1965.
IN REGARD TO THE DETERMINATION OF RESPONSIBILITY OF A PROSPECTIVE
CONTRACTOR, THE AUTHORITIES ARE IN AGREEMENT THAT THE DECISION IS TO BE
MADE BY THE AUTHORIZED OFFICIAL OF THE CONTRACTING AGENCY, WHO IS
REQUIRED TO ACT FAIRLY UPON REASONABLE INFORMATION. ONCE THE DECISION
HAS BEEN MADE IT CANNOT BE OVERTHROWN BY THE COURTS OR OUR OFFICE UNLESS
IT CAN BE SHOWN THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR
FRAUDULENT. SEE 38 COMP. GEN. 131, 33 ID. 549, BROWN V. PHOENIX, 272
P.2D 358 AND MCNICHOLS V. DENVER, 274 P.2D 317.
SINCE WE FIND NO SUCH BASIS FOR LEGAL OBJECTION TO THE ACTION TAKEN
WE CONCUR WITH THE ADMINISTRATIVE DECISION THAT THE PROTEST BE DENIED
AND THE CONTRACT NOT BE DISTURBED.
AS TO THE FUTURE EFFECT OF THE NEGATIVE FACILITY CAPABILITY REPORT
THE ARMED SERVICES PROCUREMENT REGULATION, SECTION 1-905.1 SUCCINCTLY
STATES THAT THE CONTRACTING OFFICER SHALL USE ALL INFORMATION AVAILABLE
TO HIM, WHICH INCLUDES REPORTS ON FILE OR WITHIN THE KNOWLEDGE OF OTHER
DEPARTMENT OF DEFENSE PERSONNEL, BUT ONLY TO THE EXTENT THAT SUCH
INFORMATION IS CURRENTLY VALID. FURTHERMORE, SECTION 1-905.2 PROVIDES
THAT WITH RESPECT TO FINANCIAL RESOURCES AND PERFORMANCE CAPABILITY SUCH
INFORMATION "SHALL BE OBTAINED ON AS CURRENT A BASIS AS FEASIBLE WITH
RELATION TO THE DATE OF CONTRACT AWARD.' SEE B-155199, NOVEMBER 16,
1964. CONSEQUENTLY, THE FINDING YOU COMPLAIN OF MAY NOT BE USED
AUTOMATICALLY AS A BASIS FOR REJECTION OF ANY FUTURE BIDS OR PROPOSALS.
B-157062, NOV. 5, 1965
TO CONSOLIDATED AIRBORNE SYSTEMS, INCORPORATED:
REFERENCE IS MADE TO YOUR LETTER OF JUNE 21, 1965, AND SUBSEQUENT
CORRESPONDENCE, PROTESTING AGAINST THE SMALL BUSINESS SIZE STANDARD USED
IN INVITATION FOR BIDS NO. 33-657-65-255, ISSUED BY AFSC AERONAUTICAL
SYSTEMS DIVISION, WRIGHT-PATTERSON AIR FORCE BASE, OHIO. BY YOUR LETTER
OF JULY 6, 1965, YOU LODGED A SIMILAR PROTEST IN RESPECT TO INVITATION
NO. 33-657-65-326.
INVITATION NO. 255, ISSUED ON MAY 3, 1965, REQUESTED BIDS FOR THE
FURNISHING OF LIQUID OXYGEN INDICATORS TYPE A/A24J-4, AERNO 46-1004 AND
SPECIFIED JUNE 3, 1965, AS THE DATE FOR OPENING BIDS. THE RECORD SHOWS
THAT THE CONTRACTING OFFICER DETERMINED THAT THE SMALL BUSINESS
ADMINISTRATION INDUSTRIAL CLASSIFICATION (SIC) NO. 3729 WAS APPLICABLE
TO THIS PROCUREMENT AND INCLUDED THE APPLICABLE SMALL BUSINESS
DEFINITION LIMITING BIDDING TO FIRMS WITH 1,000 OR LESS EMPLOYEES. SUCH
DETERMINATION WAS BASED ON A PRIOR DECISION OF THE SBA APPEALS BOARD,
DATED AUGUST 17, 1964, WHICH WAS NOTED IN OUR DECISION B-154597, DATED
OCTOBER 1, 1964. IN ITS DETERMINATION, THE SIZE APPEALS BOARD
DETERMINED THAT SIC NO. 3729 WAS APPLICABLE TO LIQUID OXYGEN INDICATORS.
IT IS REPORTED THAT THE ONLY DIFFERENCE BETWEEN THE INDICATORS
CONCERNED IN THAT DECISION AND THE INDICATORS INVOLVED IN THIS CASE IS
THE LIGHTING AND SIZE OF THE INDICATORS.
YOUR PROTEST IN THIS MATTER IS BASED ON YOUR CONTENTION THAT THE
INSTRUMENT BEING PROCURED SHOULD BE CLASSIFIED UNDER SIC NO. 3821
(MECHANICAL MEASURING AND CONTROLLING INSTRUMENTS, EXCEPT AUTOMATIC
TEMPERATURE CONTROLS), WITH A 500-EMPLOYEE SMALL BUSINESS SIZE STANDARD,
INSTEAD OF SIC NO. 3729 (AIRCRAFT PARTS AND AUXILIARY EQUIPMENT, NOT
ELSEWHERE CLASSIFIED), WHICH HAS A 1,000-EMPLOYEE SMALL BUSINESS SIZE
STANDARD.
IT IS ADMINISTRATIVELY REPORTED THAT YOUR PROTEST IN THIS MATTER WAS
RECEIVED ON JUNE 22, 1965, OR 19 DAYS AFTER THE SCHEDULED TIME FOR BID
OPENING. IN THIS RESPECT, PARAGRAPH 1-703 (B) (6) OF THE ARMED SERVICES
PROCUREMENT REGULATION (ASPR), PROVIDES AS FOLLOWS:
"/6) AN APPEAL FROM PRODUCT CLASSIFICATION DETERMINATION ESTABLISHING
THE SIZE DEFINITION USED IN A SPECIFIC PROCUREMENT MADE BY A CONTRACTING
OFFICER MAY BE TAKEN NOT LESS THAN 10 DAYS BEFORE BID OPENING DATE OR
CLOSING DATE FOR SUBMISSION OF PROPOSALS WHEREIN THE BID OPENING OR
CLOSING DATE IS MORE THAN 30 DAYS AFTER THE ISSUANCE OF THE IFB OR RFP,
OR NOT LESS THAN 5 WORKING DAYS BEFORE THE BID OPENING DATE OR CLOSING
DATE FOR SUBMISSION OF PROPOSALS IN CASES WHEREIN THE BID OPENING DATE
OR CLOSING DATE FOR SUBMISSION OF PROPOSALS IS 30 DAYS OR LESS AFTER THE
ISSUANCE OF AN IFB OR AN RFP. SUCH APPEALS SHALL BE DIRECTED TO THE SBA
SIZE APPEALS BOARD, WASHINGTON, D.C.'
THE FOREGOING REGULATION IS IN CONSONANCE WITH SECTION 121.3-6 (B)
(3) (II) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION, AS AMENDED, 30
F.R. 2247-56, PROVIDING FOR APPEALS FROM A PRODUCT CLASSIFICATION
DETERMINATION BY A CONTRACTING OFFICER. UNDER THESE CONTROLLING
REGULATIONS, YOUR PROTEST IN THIS PROCUREMENT WAS UNTIMELY AND COULD NOT
BE CONSIDERED.
HOWEVER, AS ABOVE INDICATED, THE SBA SIZE APPEALS BOARD, IN ITS
DECISION OF AUGUST 17, 1964, DEALING WITH A SIMILAR PROCUREMENT, HELD AS
FOLLOWS:
"E. A PRODUCTION MODEL OF THE LIQUID OXYGEN INDICATOR, TOGETHER WITH
A MECHANICAL MEASURING DEVICE, WAS SUBMITTED FOR THE BOARD'S INSPECTION
AND COMPARISON.
"F. AFTER A REVIEW OF THE EVIDENCE, THE BOARD FINDS THAT:
"/1) THE LIQUID OXYGEN INDICATOR IS NOT A MECHANICAL INSTRUMENT.
"/2) IT IS A HIGHLY COMPLEX ELECTRONIC COMPONENT OF AN OXYGEN SYSTEM
REQUIRING A SUBSTANTIAL ELECTRONICS CAPABILITY ESSENTIAL TO ITS
MANUFACTURE AND TO ASSURE ITS SUCCESSFUL OPERATION AND MAINTENANCE.
"/3) THE LIQUID OXYGEN INDICATOR DOES NOT HAVE A MEASURING OR
CONTROLLING FUNCTION.
"/4) THE COMPONENTS OF THE INDICATOR INCLUDE A NULL BALANCING
CAPACITANCE BRIDGE, A TRANSISTOR TYPE AMPLIFIER, A SERVO MOTOR, AND AN
INDICATING UNIT.
"/5) THE LIQUID OXYGEN INDICATOR INVOLVED IN THIS APPEAL IS USED
EXCLUSIVELY IN MANNED AIRCRAFT, IS A PART OF A LIQUID OXYGEN SYSTEM AND
LIQUID OXYGEN SYSTEMS FOR AIRCRAFT HAVE BEEN INCLUDED IN SIC 3729 IN THE
1963 SUPPLEMENT TO THE SIC MANUAL.
"G. IN VIEW OF THE FOREGOING, THE BOARD FINDS THAT SIC 3729 IS THE
APPROPRIATE CLASSIFICATION FOR THE LIQUID OXYGEN INDICATOR.'
SINCE THE ABOVE DECISION SUBSTANTIATES THE DETERMINATION MADE BY THE
CONTRACTING OFFICER TO USE SIC NO. 3729 IN THE INSTANT PROCUREMENT, WE
SEE NO LEGAL BASIS TO OBJECT TO SUCH DETERMINATION.
REGARDING YOUR PROTEST UNDER INVITATION NO. 326, WE NOTE THAT YOU
APPEALED THE DECISION OF THE CONTRACTING OFFICER TO INCLUDE THE SMALL
BUSINESS DEFINITION LIMITING BIDDING TO FIRMS WITH 1,000 OR LESS
EMPLOYEES (SIC NO. 3729) UNDER THAT INVITATION, COVERING THE PROCUREMENT
OF A LIQUID OXYGEN INDICATOR TYPE A/A24J-8, AERNO 46-1005. IT IS
REPORTED THAT THE CONTRACTING OFFICER CONSIDERED THIS A TIMELY APPEAL
AND REFERRED THE MATTER TO THE SBA SIZE APPEALS BOARD FOR ITS
DETERMINATION, AND ON AUGUST 13, 1965, IT WAS DETERMINED THAT SIC NO.
3729 WAS THE PROPER CLASSIFICATION IN SUCH PROCUREMENT.
UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WHICH
FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS
CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW
FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR
LENDING POWERS * * * SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S
DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED
"SMALL-BUSINESS CONCERNS," AS AUTHORIZED AND DIRECTED UNDER THIS
PARAGRAPH.'
IN VIEW OF THE FOREGOING, WE SEE NO LEGAL BASIS FOR OBJECTION TO THE
ADMINISTRATIVE ACTION IN THIS MATTER, AND YOUR PROTEST IS DENIED.
B-157471, NOV. 5, 1965
TO MUNSTON ELECTRONIC MANUFACTURING CORP. :
WE HAVE YOUR LETTER OF OCTOBER 1, 1965, REQUESTING THAT WE RECONSIDER
OUR DECISION B-157471, SEPTEMBER 28, 1965, IN WHICH WE DENIED YOUR
PROTEST OF AWARD OF A CONTRACT UNDER NAVY INVITATION FOR BIDS NO.
600-930-65 TO ANY OTHER BIDDER.
YOU IMPLY THAT WE DO NOT UNDERSTAND THE SITUATION AND STATE THAT YOU
ARE IN THE BEST POSITION TO DETERMINE WHETHER THE CHOICE OF CERTAIN
REPAIR PARTS CALLED FOR BY THE SPECIFICATION IS DEFINITE OR FLEXIBLE AND
ELECTIVE, AND FURTHER EXPRESS THE OPINION THAT THE SPECIFICATION IS NOT
DEFINITE BUT IS ELECTIVE. WE DO NOT QUESTION YOUR TECHNICAL COMPETENCE
IN THE FIELD OF ELECTRICAL PARTS, AND, ADMITTEDLY, THE GENERAL
ACCOUNTING OFFICE DOES NOT POSSESS THIS TECHNICAL COMPETENCE. WE FEEL,
HOWEVER, THAT WE ARE ABLE TO DETERMINE WHETHER OR NOT A SPECIFICATION IS
SUFFICIENTLY DEFINITE TO ALLOW BIDDERS TO COMPETE ON A COMMON BASIS, 38
COMP. GEN. 190, FOR THAT DETERMINATION DOES NOT REQUIRE KNOWLEDGE OF
THE FUNCTION OF THE VARIOUS COMPONENTS. AFTER STUDYING THE LANGUAGE OF
THE SPECIFICATION, WE ARE STILL OF THE OPINION THAT, IN VIEW OF THE
ACCOMPANYING DIAGRAMS AND DRAWINGS AND THE AVAILABILITY OF A SAMPLE
MODEL FOR STUDY, TABLE I FURNISHES A DEFINITE QUANTITY OF PARTS TO BE
FURNISHED, AND THAT ALTHOUGH THERE MAY BE SOME DISCRETION EXERCISED WITH
RESPECT TO PARTS NOT LISTED IN TABLE I, THAT DISCRETION IS LIMITED BY
WELL-DEFINED GUIDELINES. AS WE SAID BEFORE, THIS ALSO ELIMINATES THE
NECESSITY FOR AN ACCOMPANYING PARTS LIST.
IT APPEARS THAT THE FOUR OTHER BIDDERS SUBMITTING PRICES ON ITEM 3
FOUND THE SPECIFICATIONS SUFFICIENTLY DEFINITE FOR THEIR USE, SINCE
THEIR BIDS RANGED FROM $46 TO $70.50, WHILE YOURS WAS $295. THEREFORE,
THERE DOES NOT APPEAR TO HAVE BEEN A LOOSE OR VARYING INTERPRETATION OF
THE SPECIFICATION SUCH AS YOU SUGGEST.
B-157550, NOV. 5, 1965
TO MR. CHARLES R. BURWELL:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 12, 1965,
CONCERNING YOUR CLAIM FOR ADJUSTMENT AND PAYMENT OF ACCRUED LEAVE
INCIDENT TO YOUR SERVICE IN THE UNITED STATES ARMY.
THE SETTLEMENT OF AUGUST 10, 1965, BY OUR CLAIMS DIVISION DISALLOWING
YOUR CLAIM STATED THAT WHEN YOU WERE DISCHARGED FROM THE ARMY ON JUNE
19, 1964 (YOU REENLISTED JUNE 20, 1964), YOU WERE PAID FOR 56 DAYS OF
ACCRUED LEAVE BUT THAT YOU WERE ENTITLED TO BE PAID FOR ONLY 16 DAYS OF
ACCRUED LEAVE.
IN YOUR LETTER OF AUGUST 12, 1965, YOU SAY THAT THE FOURTH U.S.
ARMY, FORT SAM HOUSTON, TEXAS, DIRECTED YOU BY ORDERS OF JULY 30, 1958,
AS AMENDED AUGUST 28, 1958, TO REPORT TO FORT HAMILTON, NEW YORK, WITH
YOUR DEPENDENTS NOT LATER THAN SEPTEMBER 29, 1958, FOR TRANSPORTATION TO
YOUR OVERSEAS STATION. YOU ALSO SAY IN YOUR LETTER OF AUGUST 12, 1965,
THAT YOU DEPARTED FROM YOUR DUTY STATION AT JONESBORO, ARKANSAS, ON
SEPTEMBER 8, 1958, ON ORDINARY LEAVE AND THAT LATER WHILE YOU WERE AT
YOUR HOME OF RECORD, FOLLOWING INSTRUCTIONS RECEIVED FROM FORT SAM
HOUSTON, AND AWAITING PORT CALL FROM FORT HAMILTON, YOU RECEIVED DA FORM
31 ON SEPTEMBER 29, 1958, FROM FORT SAM HOUSTON PUTTING YOU ON
"ADMINISTRATIVE ABSENCE" DUE TO LACK OF SHIPPING SPACE. YOU CONTEND
THAT YOU WERE IN NO POSITION TO QUESTION THE ACTION OF THE FOURTH U.S.
ARMY HEADQUARTERS TAKEN FOR THE CONVENIENCE OF THE GOVERNMENT AND THAT
AS SOON AS YOU RECEIVED A FIRM PORT CALL YOU REPORTED AS INSTRUCTED.
THEREFORE IT APPEARS THAT YOU ARE REQUESTING RECONSIDERATION OF THAT
PART OF THE SETTLEMENT DATED AUGUST 10, 1965, WHICH DISALLOWED YOUR
CLAIM FOR ADJUSTMENT OF LEAVE DURING THE PERIOD YOU WERE GRANTED
ADMINISTRATIVE LEAVE.
THE RECORD BEFORE US DOES NOT CONTAIN A COPY OF YOUR ORDERS OF JULY
30, 1958, AS AMENDED. THE RECORDS SHOW THAT DA FORM 31 DATED SEPTEMBER
29, 1958, AUTHORIZED "ADMINISTRATIVE LEAVE" FOR YOU FROM THAT DATE TO
OCTOBER 28, 1958, OR TO DATE OF PORT CALL, WHICHEVER WAS EARLIER. SINCE
YOU WERE IN A LEAVE STATUS AT THE TIME DA FORM 31 WAS ISSUED, AND SINCE
YOU WERE CHARGED LEAVE DURING THE PERIOD SEPTEMBER 8, 1958, TO OCTOBER
7, 1958, YOUR CLAIM FOR ADJUSTMENT OF LEAVE ON ACCOUNT OF ADMINISTRATIVE
ABSENCE IS FOR THE PERIOD SEPTEMBER 29, 1958, TO OCTOBER 7, 1958. IN
THIS CONNECTION, THE ADMINISTRATIVE OFFICE TAKES THE VIEW, AS SHOWN BY
THE RECORD, THAT THE ABSENCE IN YOUR CASE WAS NOT ADMINISTRATIVE LEAVE
AS CONTEMPLATED BY ARMY REGULATIONS 630-20, AND, THEREFORE, YOU WERE IN
A LEAVE STATUS DURING THE PERIOD IN QUESTION.
SECTION 33 (E) OF TITLE 37, UNITED STATES CODE (1958 ED.), PROVIDED
AT THE TIME INVOLVED, THAT DETERMINATION OF THE NUMBER OF CALENDAR DAYS
OF LEAVE TO WHICH A MEMBER OR FORMER MEMBER WAS ENTITLED, INCLUDING THE
NUMBER OF CALENDAR DAYS OF ABSENCE FROM DUTY OR VACATION TO BE COUNTED
OR CHARGED AGAINST SUCH LEAVE, WOULD BE MADE IN ACCORDANCE WITH
REGULATIONS PRESCRIBED BY THE RESPECTIVE SECRETARY, AND ALL DECISIONS BY
THE SECRETARY UNDER THIS SECTION WERE FINAL AND CONCLUSIVE AND WERE NOT
SUBJECT TO REVIEW BY ANY COURT OR BY ANY OFFICER OF THE UNITED STATES.
(SECTION 704 OF TITLE 10, UNITED STATES CODE, NOW PROVIDES FOR THE USE
OF LEAVE BY MEMBERS OF THE ARMED FORCES.) IN VIEW THEREOF, AND SINCE THE
ARMY CHARGED YOU LEAVE FOR THE PERIOD SEPTEMBER 29,
1958, TO OCTOBER 7, 1958, WE MUST ACCEPT THE ADMINISTRATIVE
DETERMINATION THAT YOU WERE IN A LEAVE STATUS DURING THAT PERIOD.
ACCORDINGLY, THE DISALLOWANCE OF YOUR CLAIM FOR ADJUSTMENT OF LEAVE
DURING THAT PERIOD BY SETTLEMENT DATED AUGUST 10, 1965, WAS CORRECT AND
IS SUSTAINED.
B-157776, NOV. 5, 1965
TO MR. L. DEAN BENNER:
FURTHER REFERENCE IS MADE TO YOUR LETTER, RECEIVED SEPTEMBER 27,
1965, IN EFFECT REQUESTING REVIEW OF THE SETTLEMENT OF AUGUST 6, 1965,
WHICH DISALLOWED YOUR CLAIM FOR DISLOCATION ALLOWANCE AND LIMITED
REIMBURSEMENT ON YOUR CLAIM FOR TRAVEL OF YOUR DEPENDENTS FROM FORT
LEWIS, WASHINGTON, TO KEY WEST, FLORIDA, AND FROM MOUNT HOLLY, NEW
JERSEY, TO EVERETT, WASHINGTON, TO THE AMOUNT DUE FOR TRAVEL FROM FORT
LEWIS TO EVERETT, WASHINGTON. THE AMOUNT ALLOWED, $4.38, WAS APPLIED IN
PARTIAL LIQUIDATION OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE SUM
OF $56.25 ARISING FROM NON-DEDUCTION OF CLASS B ALLOTMENT ($18.75 PER
MONTH) FOR THE PERIOD DECEMBER 1963 THROUGH FEBRUARY 1964, AS REPORTED
TO US BY THE ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA.
BY PARAGRAPH 43, SPECIAL ORDERS NO. 183, DATED JULY 14, 1964, YOU
WERE TRANSFERRED FROM FORT LEWIS, WASHINGTON, TO APO 827, AS A PERMANENT
CHANGE OF STATION. THE ORDERS AUTHORIZED 45 DAYS' DELAY EN ROUTE
CHARGEABLE AS LEAVE AND DIRECTED YOU TO REPORT AT FORT DIX, NEW JERSEY,
ON SEPTEMBER 11, 1964, FOR TRANSPORTATION TO YOUR OVERSEAS STATION.
CONCURRENT TRAVEL OF DEPENDENTS WAS NOT AUTHORIZED. ON OCTOBER 8, 1964,
WHILE AT FORT DIX AWAITING TRANSPORTATION TO YOUR PERMANENT STATION
OVERSEAS, YOU SUBMITTED A REQUEST FOR A DEPENDENCY DISCHARGE. THE
REQUEST WAS APPROVED AND YOU WERE RELEASED FROM ACTIVE DUTY ON OCTOBER
30, 1964, BY SPECIAL ORDERS NO. 302, U.S. ARMY PERSONNEL CENTER, FORT
DIX, DATED OCTOBER 28, 1964. ON NOVEMBER 7, 1964, YOU EXECUTED A CLAIM
FOR TRAVEL OF YOUR DEPENDENTS (WIFE AND INFANT DAUGHTER) FROM FORT
LEWIS, WASHINGTON, TO KEY WEST, FLORIDA, JULY 25 TO AUGUST 30, 1964,
PLUS DISLOCATION ALLOWANCE, AND FROM MOUNT HOLLY, NEW JERSEY, TO
EVERETT, WASHINGTON, OCTOBER 31 TO NOVEMBER 6, 1964. ON THE REVERSE OF
THE CLAIM FORM YOU STATED THAT ON OR ABOUT SEPTEMBER 15, 1964, YOUR
FAMILY JOINED YOU AT FORT DIX, NEW JERSEY, WHEN YOU FOUND OUT THAT YOU
WOULD BE DISCHARGED UNEXPECTEDLY. YOUR CLAIMS WERE SUPPORTED BY AN
AFFIDAVIT BY YOUR WIFE'S AUNT, MARTHA G. MATTHEWS, NORFOLK, VIRGINIA,
DATED MARCH 9, 1965, THAT YOUR WIFE AND DAUGHTER RESIDED IN HER HOME
FROM SEPTEMBER 1 TO OCTOBER 31, 1964.
IN THE SETTLEMENT MENTIONED ABOVE REIMBURSEMENT FOR TRAVEL OF
DEPENDENTS IN EXCESS OF THE AMOUNT DUE FOR TRAVEL FROM FORT LEWIS,
WASHINGTON (LAST PERMANENT DUTY STATION), TO EVERETT, WASHINGTON (HOME
OF RECORD), WAS DENIED ON THE BASIS THAT THE JOINT TRAVEL REGULATIONS
PROHIBIT TRANSPORTATION OF DEPENDENTS UPON PERMANENT CHANGE OF STATION
TO A PLACE AT WHICH THEY DO NOT INTEND TO ESTABLISH A RESIDENCE. THE
DISLOCATION ALLOWANCE WAS DISALLOWED FOR THE REASON THAT UNDER THE JOINT
TRAVEL REGULATIONS SUCH ALLOWANCE IS NOT PAYABLE ON THE MOVE FROM LAST
STATION TO HOME UPON SEPARATION FROM THE SERVICE.
IN YOUR PRESENT LETTER YOU CONTEND THAT YOUR DEPENDENTS ESTABLISHED A
RESIDENCE IN NORFOLK WHERE THEY INTENDED TO REMAIN WHILE YOU WERE IN
PANAMA; THAT, HOWEVER, WHEN YOU LEARNED THAT YOUR WIFE, WHO HAD BEEN
UNDER MEDICAL TREATMENT FROM NOVEMBER 1963 TO JULY 1964, INTENDED TO
FOLLOW YOU TO PANAMA WITHOUT YOUR KNOWLEDGE, YOU WERE COUNSELED TO APPLY
FOR A DEPENDENCY DISCHARGE. YOU FURTHER SAY THAT YOUR WIFE RECEIVED
MEDICAL TREATMENT AFTER HER ARRIVAL AT FORT DIX AND THAT YOU AND SHE
LIVED IN MOUNT HOLLY, NEW JERSEY. WITH RESPECT TO THE INDEBTEDNESS OF
$56.25 ARISING FROM NON-DEDUCTION OF CLASS B ALLOTMENT YOU SAY THAT THIS
SUM WAS DEDUCTED FROM YOUR PAY IN MARCH 1964.
THE ORDERS OF JULY 14, 1964, INVOLVED A PERMANENT CHANGE OF STATION
TO A DUTY STATION IN A RESTRICTED STATION OVERSEAS. INCIDENT TO SUCH AN
ASSIGNMENT, 37 U.S.C. 406, AND THE JOINT TRAVEL REGULATIONS ISSUED
THEREUNDER AUTHORIZE TRANSPORTATION OF DEPENDENTS TO ANY PLACE IN THE
UNITED STATES SELECTED BY THE MEMBER FOR THEIR RESIDENCE UNTIL THE
RESTRICTION AT THE DUTY STATION IS REMOVED OR THE MEMBER RECEIVES
FURTHER TRANSFER.
IN YOUR LETTER OF MARCH 16, 1965, YOU STATED THAT YOUR WIFE ONLY
TRAVELED AS FAR AS NORFOLK; THAT SHE INTENDED TO TRAVEL TO KEY WEST
LATER BUT DID NOT DO SO BECAUSE OF ILLNESS IN HER AUNT'S FAMILY THERE,
AND THAT YOU CLAIMED DEPENDENT TRAVEL TO KEY WEST IN ERROR. SINCE YOUR
DEPENDENTS JOINED YOU AT FORT DIX IN MID-SEPTEMBER AND YOU EXECUTED THE
CLAIM FOR THEIR TRAVEL IN NOVEMBER YOU MUST HAVE KNOWN AT THAT TIME,
EVEN THOUGH YOU CERTIFIED IN THE CLAIM THAT THEY ACTUALLY TRAVELED TO
KEY WEST WITH THE INTENT OF ESTABLISHING A BONA FIDE RESIDENCE, THAT
YOUR DEPENDENTS HAD NOT IN FACT TRAVELED TO KEY WEST AS CLAIMED BUT HAD
TRAVELED ONLY TO NORFOLK, A LESSER DISTANCE. THUS, YOUR CLAIM MAY NOT
BE REGARDED AS MERELY ERRONEOUS.
CLAIMS AGAINST THE UNITED STATES MUST BE BASED ON TRUE FACTS, AND IT
IS INCUMBENT UPON THE CLAIMANT TO FURNISH EVIDENCE SATISFACTORILY
ESTABLISHING THE CLEAR LIABILITY OF THE UNITED STATES TO PAY THE CLAIM.
WHERE A CLAIM IS OF DOUBTFUL VALIDITY IT IS THE PRACTICE OF THIS OFFICE
TO DENY PAYMENT AND LEAVE THE CLAIMANT TO HIS REMEDY IN THE COURTS. SEE
LONGWILL V. UNITED STATES, 17 CT.CL. 288, AND CHARLES V. UNITED STATES,
19 CT.CL. 316. COMPARE KAMEN SOAP PRODUCTS COMPANY INC. V. UNITED
STATES, 129 CT.CL. 619. CLAIMS WHICH APPEAR TO INVOLVE A KNOWING
MISREPRESENTATION OF A MATERIAL FACT ARE SUBJECT TO THAT RULE. IN THE
CIRCUMSTANCES INVOLVED THE CLAIM FOR YOUR DEPENDENTS' TRAVEL TO NORFOLK
IS TOO DOUBTFUL FOR ALLOWANCE BY THIS OFFICE AND WE HAVE NO ALTERNATIVE
BUT TO SUSTAIN ITS DISALLOWANCE.
HOWEVER, SINCE IT APPEARS THAT YOU INTENDED TO GO OVERSEAS IN
COMPLIANCE WITH YOUR ORDERS; THAT THEY WERE CANCELED AFTER THE
EFFECTIVE DATE; THAT YOUR DEPENDENTS TRAVELED TO THE EAST COAST WITH
THE ORIGINAL INTENTION OF ESTABLISHING A RESIDENCE WHILE YOU WERE
OVERSEAS; AND THAT THEY WERE AT FORT DIX WHEN YOU WERE RELEASED FROM
ACTIVE DUTY AND TRAVELED TO YOUR HOME OF RECORD, EVERETT, WASHINGTON, IT
IS CONSIDERED THAT YOU ARE ENTITLED TO REIMBURSEMENT FOR TRAVEL OF
DEPENDENTS NOT TO EXCEED FROM FORT DIX, NEW JERSEY, TO EVERETT,
WASHINGTON. WITH RESPECT TO DISLOCATION ALLOWANCE, SINCE THE ONLY
RECOGNIZED MOVE OF YOUR DEPENDENTS WAS INCIDENT TO YOUR RELEASE FROM
ACTIVE DUTY, PAYMENT OF A DISLOCATION ALLOWANCE IS PROHIBITED BY 37
U.S.C. 407 (C), WHICH SPECIFICALLY PROVIDES THAT SUCH ALLOWANCE IS NOT
PAYABLE IN CONNECTION WITH THE CHANGE OF STATION FROM LAST STATION TO
HOME.
A TRANSCRIPT OF YOUR PAY RECORD FOR THE PERIOD MARCH 1, 1964, TO
OCTOBER 30, 1964, SHOWS THAT IN MAY 1964, THE SUM OF $93.75,
REPRESENTING NON-DEDUCTION OF CLASS B ALLOTMENT ($18.75 PER MONTH FOR
DECEMBER 1963 THROUGH APRIL 1964), WAS DEDUCTED FROM YOUR PAY IN THAT
MONTH. THEREFORE, THE RECORD NOW SHOWS YOU WERE NOT INDEBTED TO THE
UNITED STATES BY REASON OF NON-DEDUCTION OF CLASS B ALLOTMENT.
ACCORDINGLY, A SETTLEMENT FOR THE AMOUNT DUE FOR TRAVEL OF DEPENDENTS
ON THE BASIS INDICATED ABOVE WILL ISSUE IN DUE COURSE.
B-157795, NOV. 5, 1965
TO ACTECH CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 4, 1965, PROTESTING THAT
YOUR QUOTATION ON ITEM 3 UNDER REQUEST FOR PROPOSALS 383/705503/66 P
ISSUED BY THE AVIATION SUPPLY OFFICE, DEPARTMENT OF THE NAVY, IS NOT
BEING CONSIDERED.
OUR OFFICE HAS BEEN ADVISED BY THE PROCUREMENT AGENCY THAT
TELEPHONICS CORPORATION IS THE ONLY COMPANY FROM WHICH A PROPOSAL WAS
SOLICITED FOR FURNISHING VARIOUS CORD ASSEMBLIES FOR USE WITH AN/AIC-14
AIRBORNE INTERCOMMUNICATION SYSTEMS AS THERE ARE NO GOVERNMENT
SPECIFICATIONS WHICH COMPLETELY DEFINE THE ITEMS AND THEY ARE
MANUFACTURED SOLELY IN ACCORDANCE WITH DRAWINGS AND SPECIFICATIONS OF
THE TELEPHONICS CORPORATION AGAINST WHICH THEY ARE TESTED AND INSPECTED.
MOREOVER, THE AGENCY ADVISES THAT PRESENTLY THE DRAWINGS AND
SPECIFICATIONS ARE NOT AVAILABLE FOR COMPETITIVE PROCUREMENT. HOWEVER,
IT STATES THAT IT EXPECTS TO RECEIVE FROM TELEPHONICS AT AN EARLY DATE
DATA WHICH WILL BE ADEQUATE FOR A FORMALLY ADVERTISED COMPETITION ON
ITEM 3. THEREFORE, THE CONTRACTING OFFICER HAS DECIDED TO CANCEL THE
SOLICITATION FOR ITEM 3 UNDER THE REQUEST FOR PROPOSALS AND TO ISSUE AN
INVITATION FOR BIDS FOR THIS ARTICLE WHEN THE GOVERNMENT RECEIVES THE
DATA. WE ARE ADVISED THAT YOUR COMPANY WILL BE SOLICITED FOR A BID WHEN
THE INVITATION FOR BIDS IS ISSUED.
B-151944, NOV. 4, 1965
TO HONORABLE LAWSON B. KNOTT, JR., ADMINISTRATOR, GENERAL SERVICES
ADMINISTRATION:
THIS IS IN REPLY TO A LETTER DATED AUGUST 17, 1965, FROM YOUR
ASSISTANT GENERAL COUNSEL, REGULATIONS AND GENERAL LAW DIVISION,
REQUESTING COMMENTS ON CERTAIN PROPOSED STANDARD FORMS PERTAINING TO
COST OR PRICING DATA REQUIREMENTS.
FORM (A/--- CONTRACT PRICING PROPOSAL: THE PROPOSED CONTRACT
ESTIMATE IS TO BE BASED ON INFORMATION SUPPLIED BY THE CONTRACTOR IN
RESPONSE TO THE "REFERENCE" COLUMN OF THE FORM. NOTE 3 EXPLAINS WHAT
INFORMATION IS TO BE FURNISHED. BASICALLY, THE CONTRACTOR SHOULD
FURNISH ACCURATE, COMPLETE AND CURRENT FACTUAL INFORMATION NECESSARY TO
SUPPORT A SOUND JUDGMENT AS TO THE ESTIMATED OR FUTURE COSTS. FPR
1-3.807-3 (H). WE HAVE NO RECOMMENDATIONS TO MAKE AT THIS TIME;
HOWEVER, THE NEED FOR REVISIONS OR CHANGES MAY BECOME APPARENT AS A
RESULT OF OUR AUDIT WORK.
FORM (G/--- ROYALTY REPORT: WE RECOMMEND THAT THE INSTRUCTIONS TO
THE CONTRACTOR PERTAINING TO DOMESTIC ROYALTY REPORTS BE CLARIFIED TO
SPECIFY WHICH ITEMS ON THE FORM SHOULD BE COMPLETED.
WE UNDERSTAND THAT THE ASPR FORMS PARALLEL TO YOUR FORMS (D), (E) AND
(F) ARE CURRENTLY BEING REVISED. ANY REVISIONS TO THESE ASPR FORMS
SHOULD BE CONSIDERED PRIOR TO INCORPORATION OF THE PROPOSED FORMS IN THE
FPR. WE ARE ADVISED THAT THE ASPR DD FORM 633-4, PARALLEL TO YOUR FORM
(B/--- COST AND PRICE ANALYSIS--- RESEARCH AND DEVELOPMENT CONTRACTS,
HAS BEEN DISCONTINUED. WE HAVE NO RECOMMENDATIONS TO MAKE AS TO FORM
(C/--- COST AND PRICE ANALYSIS FOR CONTRACT PRICE REDETERMINATION.
THIS OFFICE FAVORS THE INCORPORATION OF SUCH FORMS IN THE FPR. AS
STATED ABOVE, WE MUST RESERVE THE RIGHT TO MAKE RECOMMENDATIONS AS A
RESULT OF OUR AUDIT WORK.
B-155475, NOV. 4, 1965
TO SECRETARY OF THE AIR FORCE:
ON OCTOBER 25, 1965, THE HONORABLE JOHN JARMAN, HOUSE OF
REPRESENTATIVES, SENT US A COPY OF THE BILL H.R. 11676, 89TH CONG., 1ST
SESS., WHICH HE INTRODUCED ON OCTOBER 19, 1965, PROPOSING TO RELIEVE
NINE EMPLOYEES AT TINKER AIR FORCE BASE, OKLAHOMA, FROM LIABILITY TO
REPAY THE OVERPAYMENTS OF COMPENSATION WHICH ARE LISTED OPPOSITE THE
EMPLOYEES' NAMES IN SECTION 2 OF H.R. 11676. REPRESENTATIVE JARMAN'S
LETTER TO US INDICATES THAT HE MAILED A COPY OF IT TO THE CHIEF,
CIVILIAN PAY SECTION, ACCOUNTING AND FINANCE DIVISION, OKLAHOMA CITY AIR
MATERIEL AREA, TINKER AIR FORCE BASE, OKLAHOMA 73145.
RESPONDING TO REPRESENTATIVE JARMAN'S REQUEST WE HAVE ADVISED HIM
THAT OUR OFFICE WOULD NOT OBJECT TO THE DEFERMENT OF COLLECTION ACTION
UNTIL THE EXPIRATION OF THE NEXT SESSION OF THE 89TH CONGRESS OR UNTIL
CONGRESS ACTS ON H.R. 11676, WHICHEVER SHALL FIRST OCCUR. HOWEVER, WE
WOULD APPRECIATE AN EXPRESSION OF YOUR VIEWS IN THE MATTER.
B-156086, NOV. 4, 1965
TO CONTROL ENGINEERING CORPORATION:
REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1965, REQUESTING REVIEW
OF DECISION DATED JUNE 21, 1965, B-156086, WHICH SUSTAINED OUR DECISION
OF APRIL 5, 1965, TO YOU, AND IN WHICH WE STATED THAT WE FOUND NO VALID
BASIS FOR OBJECTING TO THE ACTIONS OF THE DEPARTMENT OF THE NAVY IN
CONSIDERING YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO.
600-448-65 TO BE NONRESPONSIVE. IN VIEW OF THE ALLEGATIONS IN YOUR MOST
RECENT LETTER, WE REQUESTED A SUPPLEMENTAL REPORT FROM THE DEPARTMENT OF
THE NAVY.
WITH REGARD TO THE ALLEGATIONS IN YOUR LETTER OF JULY 7, 1965,
DEALING WITH THE FREQUENCY RESPONSE ASPECT OF THE SPECIFICATIONS IN
QUESTION, THE DEPARTMENT OF THE NAVY REPORTS AS FOLLOWS:
"1. THE REFERENCED INVITATION CALLED FOR A VIDEO LINE AMPLIFIER TO
BE USED AS A COMPONENT PART OF A TELEVISION SYSTEM. THE INVITATION
REQUIRED A FREQUENCY RESPONSE OF PLUS OR MINUS (T) 0.25 DECIBELS (DB) TO
7 MEGACYCLES (MC) AND T 3DB TO 8 MC. RAM ELECTRONICS SUBMITTED A BID
OFFERING AN AMPLIFIER WITH A FREQUENCY RESPONSE TO T LDB TO 8 MC.
QUESTION HAS ARISEN CONCERNING WHETHER RAM'S OFFER OF T LDB TO 8 MC
MEETS THE SPECIFICATION REQUIREMENT OF T 0.25 DBTO 7 MC.
"2. ALTHOUGH THE SPECIFICATION REQUIRED A FREQUENCY RESPONSE OF T
0.25 DECIBELS FROM 0 TO 7 MEGACYCLES, THE RESPONSE BECOMES CRITICAL AS
THE BAND WIDTH IS EXTENDED INTO THE UPPER RANGES. THUS THE PRIMARY
ENGINEERING PROBLEM IN DESIGN AND PRODUCTION OF A VIDEO AMPLIFIER IS TO
EXTEND THE RANGE AT THE HIGH END OF THE FREQUENCY RESPONSE CURVE, I.E. 7
AND 8 MEGACYCLES. THE HIGHER THE FREQUENCY AT WHICH THE RESPONSE CAN BE
MAINTAINED, THE FINER THE DETAIL WHICH WILL BE PRODUCED IN THE
TELEVISION PICTURE. RAM OFFERED TO PRODUCE A DESIRABLE RESPONSE AT A
HIGHER FREQUENCY THAN THAT SPECIFIED IN THE INVITATION, I.E., T LDB AT 8
MC RATHER THAN T 3DB AT 8 MC. CONSEQUENTLY, THE AMPLIFIER CAN BE
EXPECTED TO PRODUCE A PICTURE OF A QUALITY EQUAL TO OR BETTER THAN THAT
ANTICIPATED.
"3. EVALUATION OF THE BID FROM AN ENGINEERING STANDPOINT REVEALS
THAT RAM'S OFFERED RESPONSE OF T LDB TO 8 MC MEETS THE SPECIFICATION
REQUIREMENT OF T 0.25 DBTO 7MC FOR THE FOLLOWING EASONS:
A. IT IS THE OPINION OF THIS OFFICE THAT ANY VIDEO AMPLIFIER WHICH
PRODUCES A FREQUENCY RESPONSE OF T LDB TO 8MC WOULD ALSO BE CAPABLE OF
PRODUCING A RESPONSE OF T 0.25DB TO 7MC. THE AMPLIFIER IN QUESTION IS A
RESISTANCE COUPLED AMPLIFIER, THE ONLY TYPE SUITABLE FOR USE IN A
TELEVISION SYSTEM. IT IS AN INHERENT CHARACTERISTIC OF THIS TYPE OF
AMPLIFIER THAT THERE WILL BE LITTLE DROP OFF IN FREQUENCY RESPONSE IN
THE LOWER RANGES. A UNIT WHICH PRODUCES A RESPONSE OF T LDB TO 8MC
WOULD, IN OUR OPINION, PRODUCE A RESPONSE WITHIN T 0.25 TO 7MC.
B. IN ORDER TO PRODUCE A RESPONSE OF T LDB TO 8MC AN ENGINEERING
PROCESS MUST BE UNDERTAKEN TO BOOST THE RESPONSE THROUGHOUT MUCH OF ITS
FREQUENCY RANGE. TO ACHIEVE THE DESIRED RESPONSE AT THE HIGHER RANGES
SEVERAL PEAKING COMPONENTS MUST BE INTEGRATED INTO THE EQUIPMENT TO
CORRECT THE RESPONSE AND TO PREVENT IT FROM DROPPING OFF AT SUCCESSIVE
STEPS IN THE FREQUENCY RANGE. THUS A VIDEO AMPLIFIER WHICH IS
ENGINEERED TO PRODUCE A FREQUENCY RESPONSE OF T LDB TO 8MC HAS
NECESSARILY BEEN BOOSTED ALONG THE LOWER FREQUENCY RANGES TO PREVENT THE
CURVE FROM DROPPING OFF AT 7MC, 6MC, 5MC, ETC. IT IS THE OPINION OF
THIS OFFICE THAT THE ENGINEERING REQUIRED IN THE LOWER RANGES OF AN
AMPLIFIER PRODUCING A T LDB TO 8MC RESPONSE WOULD NECESSARILY RESULT IN
A FREQUENCY RESPONSE WITHIN T 0.25DB TO 7MC.
C. IT SHOULD ALSO BE NOTED THAT WHEN THE DESCRIBED CORRECTION
PROCESS IS NO LONGER APPLIED AT A PARTICULAR RANGE, THE DROP OFF IN
FREQUENCY RESPONSE IS RAPID. SINCE RAM'S BID PROPOSES A MAXIMUM DROP
OFF OF LDB AT 8MC, IT IS OBVIOUS THAT SOME CORRECTION IS BEING APPLIED
IN THE 7MC TO 8MC RANGE. THE SPECIFICATION REQUIREMENT, ON THE OTHER
HAND, ALLOWS A RAPID DROP OFF BETWEEN 7MC AND 8MC, I.E., 0.25DB TO 3DB.
TO MEET THIS REQUIREMENT WOULD REQUIRE LITTLE OR NO RESPONSE CORRECTION
BETWEEN 7MC AND 8MC. THE LOGICAL CONCLUSION IS THAT THE RESPONSE
OFFERED BY RAM IS HIGHER THAN THE RESPONSE REQUESTED IN THE INVITATION
AND THAT THE OFFERED EQUIPMENT EXCEEDS THE SPECIFICATION REQUIREMENTS.
"4. ALTHOUGH IT WOULD APPEAR FROM AN EXAMINATION OF THE NUMERICAL
FIGURES THAT RAM OFFERED A WIDER TOLERANCE BELOW 7 MEGACYCLES THAN THAT
REQUIRED BY THE SPECIFICATION (I.E., T LDB IN LIEU OF T 0.25 DB), RAM'S
BID IS CONSIDERED TO BE TECHNICALLY RESPONSIVE. FOR THE REASONS STATED
ABOVE, IT IS OUR OPINION THAT AN AMPLIFIER WHICH PRODUCES A RESPONSE OF
T LDB AT 8MC WOULD ALSO PRODUCE A RESPONSE WITHIN T 0.25DB AT 7 MC AND
BELOW. RAM OFFERED AN AMPLIFIER WITH A FREQUENCY RESPONSE REPRESENTED
IN DIFFERENT TERMS THAN THE RESPONSE SPECIFIED IN THE IFB. THE OFFER
DID NOT, HOWEVER, DEVIATE FROM THE SUBSTANCE OF THE SPECIFICATION
REQUIREMENT.
"5. IT IS THE POSITION OF THIS OFFICE THAT RAM'S OFFER MEETS THE
SPECIFICATION REQUIREMENT AND PROBABLY EXCEEDS IT.'
AS WE HAVE POINTED OUT IN OUR PRIOR DECISIONS TO YOU IN THIS MATTER,
THE QUESTION OF WHETHER CERTAIN EQUIPMENT OFFERED BY A BIDDER MEETS THE
TECHNICAL REQUIREMENTS OF A SPECIFICATION IS A MATTER PRIMARILY FOR
DETERMINATION BY THE TECHNICAL PERSONNEL EMPLOYED BY THE ADMINISTRATIVE
AGENCIES AS OUR OFFICE DOES NOT EMPLOY SUCH PERSONNEL. NEITHER IS IT
OUR FUNCTION TO CONSULT OR EMPLOY OUTSIDE "TECHNICAL OPINION" TO WEIGH
THE TECHNICAL MERITS OF A PROTESTANT'S CONTENTIONS AGAINST THAT OF THE
PROCURING AGENCY'S FINDINGS. IT IS OUR FUNCTION TO SEE THAT CONTRACTS
INVOLVING THE EXPENDITURE OF PUBLIC FUNDS BE LEGALLY MADE, INCLUDING
OBSERVANCE OF THE LAW RESPECTING COMPETITIVE BIDDING.
WHILE WE APPRECIATE THE EARNESTNESS AND CONVICTION APPARENT IN YOUR
PROTEST LETTERS, THE FACT OF THE MATTER IS THAT YOUR DISAGREEMENT AND
CONTENTIONS IN THIS CASE REVOLVE ABOUT THE TECHNICAL AND SCIENTIFIC
ASPECTS OF THE PROCUREMENT. IN THIS REGARD, IN OUR DECISION B-139830,
DATED AUGUST 19, 1959, WE MADE THE FOLLOWING OBSERVATION:
"THIS OFFICE HAS NEITHER AN ENGINEERING STAFF NOR A TESTING
LABORATORY TO EVALUATE THE TECHNICAL ASPECTS OF SPECIFICATIONS.
MOREOVER, IN DISPUTES OF FACT BETWEEN A PROTESTANT AND A GOVERNMENT
AGENCY, WE USUALLY ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE REPORT AS
CORRECT. WHETHER A PARTICULAR BID IS RESPONSIVE TO THE TECHNICAL
DETAILS OF THE SPECIFICATIONS IS NOT A MATTER, ORDINARILY, FOR OUR
DETERMINATION. * * *"
IN VIEW OF THE FOREGOING, WE MUST AFFIRM OUR DECISIONS OF APRIL 5,
1965, AND JUNE 21, 1965, TO YOU IN THIS MATTER.
B-156955, NOV. 4, 1965
TO MR. J. J. BRODERICK, GOVERNMENT SALES, BIG JOE MANUFACTURING
COMPANY:
REFERENCE IS MADE TO YOUR LETTERS OF JUNE 14 AND 28, 1965, PROTESTING
THAT THE BID SUBMITTED BY YOUR COMPANY UNDER INVITATION FOR BIDS
MD-05-015-65-35 IS NOT NONRESPONSIVE AND SHOULD NOT BE REJECTED.
OUR OFFICE HAS RECEIVED A REPORT FROM THE DEPARTMENT OF THE ARMY
INDICATING THAT AFTER A COMPLETE REVIEW OF THE MATTER IT IS BELIEVED
THAT THE "OR EQUAL" PURCHASE DESCRIPTION WHICH WAS UTILIZED IN THE
INVITATION FOR BIDS DID NOT ADEQUATELY DESCRIBE THE GOVERNMENT'S
REQUIREMENTS. THE DEPARTMENT THEREFORE PROPOSES TO CANCEL THE
INVITATION AND TO PREPARE A NEW INVITATION WITH A DETAILED FUNCTIONAL
SPECIFICATION IN PLACE OF THE "OR EQUAL" PURCHASE DESCRIPTION WHICH WAS
EMPLOYED ORIGINALLY.
IN VIEW OF THE REPRESENTATIONS MADE BY THE DEPARTMENT, OUR OFFICE
WOULD HAVE NO OBJECTION IF THE INVITATION WERE CANCELED AND READVERTISED
ON A NEW SPECIFICATION. SINCE SUCH RESULT RENDERS YOUR PROTEST MOOT, IT
IS NOT NECESSARY THAT IT BE CONSIDERED BY OUR OFFICE.
B-157411, NOV. 4, 1965
TO SECRETARY OF DEFENSE:
WE ARE ENCLOSING A COPY OF OUR LETTER OF TODAY TO THE SECRETARY OF
THE NAVY CONCERNING THE PROTEST OF WESTERN MOLDED FIBRE PRODUCTS, INC.,
AGAINST THE POSSIBLE AWARD OF CONTRACTS TO DODGE CORK COMPANY, BY THE
SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, UNDER
INVITATIONS FOR BIDS NO. 104-3-66/215) AND NO. 104-18-66/211).
YOUR ATTENTION IS INVITED TO THE FACT THAT ALTHOUGH THESE
PROCUREMENTS WERE INITIALLY SET ASIDE FOR SMALL BUSINESS CONCERNS AND
BIDS SOLICITED UNDER SMALL BUSINESS RESTRICTED ADVERTISING PROCEDURES
PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-706.5, AWARD ON
IFB--- (211) IS PROPOSED TO THE ONLY SMALL BUSINESS BIDDER ON THE BASIS
OF SUBSEQUENT NEGOTIATIONS WHICH RESULTED IN A REDUCTION IN ITS
OTHERWISE UNREASONABLE BID PRICE.
WE SEE NO VALID BASIS FOR DISTINGUISHING, IN PRINCIPLE, BETWEEN THE
QUESTION IN THE INSTANT PROCUREMENT AND THE QUESTION WHICH GAVE RISE TO
OUR LETTER OF DECEMBER 6, 1962, B-149631, COPY ENCLOSED, AND WHICH WAS
SUBSEQUENTLY CLARIFIED BY AMENDMENT OF ASPR 3-210. WE THEREFORE
RECOMMEND THAT CONSIDERATION BE GIVEN TO REVISING ASPR TO CLEARLY
INDICATE THAT NEGOTIATIONS TO OBTAIN REASONABLE PRICES, FOLLOWING
FAILURE TO RECEIVE REASONABLE PRICES UNDER SMALL BUSINESS RESTRICTED
ADVERTISING, MAY NOT BE RESTRICTED TO EITHER ONE OR ALL OF THE SMALL
BUSINESS CONCERNS WHICH SUBMITTED SUCH UNREASONABLE BID PRICES.
B-157453, NOV. 4, 1965
TO REMINGTON OFFICE MACHINES:
REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10, 1965, REQUESTING
REFORMATION OR RESCISSION OF YOUR PURCHASE ORDER NO. 01-18-035-C5-20353
(A) ENTERED INTO WITH THE EDGEWOOD ARSENAL, DEPARTMENT OF THE ARMY, ON
JUNE 30, 1965. THIS PURCHASE ORDER WAS ENTERED INTO IN RESPONSE TO THE
TERMS OF INVITATION FOR BIDS AMC (A/-18-035-65-974 COVERING MAINTENANCE
SERVICES FOR 124 GOVERNMENT-OWNED REMINGTON CALCULATORS AND ADDING
MACHINES FOR THE PERIOD JULY 1, 1965 TO JUNE 30, 1966. AT THE SCHEDULED
TIME FOR BID OPENING, JUNE 29, 1965, THREE BIDS HAD BEEN RECEIVED AND
WERE PUBLICLY OPENED. REPRESENTATIVES OF REMINGTON OFFICE MACHINES WERE
PRESENT AT THE TIME. THE INVITATION FOR BIDS SPECIFICALLY INDICATED
THAT AWARD WAS TO BE MADE BY LOT, I.E., TO THE ONE BIDDER WHOSE TOTAL
BID FOR ALL ITEMS IN THE LOT WOULD BE THE MOST ADVANTAGEOUS TO THE
GOVERNMENT. THE LOWEST BID RECEIVED BY LOT WAS THE BID SUBMITTED BY
REMINGTON OFFICE MACHINES IN THE AMOUNT OF $3,882.72. THE OTHER TWO
BIDS RECEIVED WERE IN THE AMOUNTS OF $4,224.00 AND $5,131.00, BY LOT.
EXCEPT ON ITEMS 1 AND 4, REMINGTON'S BID OF $3,882.72 MADE NO
DISTINCTION IN PRICE BETWEEN THE ITEM PRICES FOR ADDING MACHINES AND
CALCULATORS. IN AN ATTEMPT TO CLEAR UP THIS POSSIBLE IRREGULARITY, MR.
JAMES B. MITCHELL, WHO SIGNED REMINGTON'S BID AS BRANCH CED MANAGER, WAS
CONTACTED ON JUNE 29, 1965. HE ADVISED THAT THE UNIT PRICE QUOTED WAS
THE COMPANY'S PRICE FOR MACHINES LOCATED WITHIN "ZONE 1," AND THAT THE
PRICES SUBMITTED HAS BEEN BASED ON SERIAL NUMBER, RATHER THAN MODEL
NUMBER. IT WAS ALSO NOTED THAT THE BID PRICE OF REMINGTON FOR SOME OF
THE ITEMS BID WAS IDENTICAL TO THOSE ITEMS SHOWN ON THE FEDERAL SUPPLY
SCHEDULE AS REMINGTON'S PRICES FOR ,ZONE 1.' IN ORDER TO ASCERTAIN IN
WHICH "ZONE" EDGEWOOD ARSENAL WAS LOCATED, AND WHETHER A DUAL BID WAS
BEING SUBMITTED (THE SAME BID ON BOTH THE ARMY IFB AND THE FEDERAL
SUPPLY SCHEDULE), ON JUNE 29 THE GENERAL SERVICES ADMINISTRATION WAS
CONTACTED BY TELEPHONE AND IT WAS ASCERTAINED THAT EDGEWOOD ARSENAL FELL
WITHIN "ZONE 1" AND THAT NO PROHIBITION EXISTED TO PREVENT REMINGTON
FROM ENTERING A BID FOR SERVICES ON MACHINES AT THAT LOCATION AT THE
SAME PRICES QUOTED FOR ZONE 1 ON THE FEDERAL SUPPLY SCHEDULE.
BASED UPON THE FOREGOING, AWARD OF PURCHASE ORDER NO.
01-18-035-C5-20353 (A) WAS MADE TO REMINGTON OFFICE MACHINES ON JUNE 30,
1965. BY LETTER DATED JULY 13, 1965, YOUR COMPANY'S BRANCH MANAGER, MR.
E. W. MALLISON, ADVISED EDGEWOOD ARSENAL THAT A MISTAKE HAD BEEN MADE IN
THE BID, AND PERMISSION TO WITHDRAW OR REVISE THE BID WAS REQUESTED FOR
THE FOLLOWING REASONS:
"1. THE REMINGTON BID DOES NOT COMPLY WITH THE CONTRACT NEGOTIATED
BY G.S.A. AND REMINGTON OFFICE MACHINES.
"2. THE BID WAS PRICED BY A CLERK WHO DID NOT DIFFERENTIATE BETWEEN
ADDING MACHINES AND CALCULATORS. ALL MACHINES CONSEQUENTLY WERE BID AT
ADDING MACHINES PRICE.
"3. THE BID WAS SIGNED BY J. B. MITCHELL WHO IS NOT AUTHORIZED TO
SIGN SUCH BIDS.
"4. THE BID SHOULD HAVE BEEN SUBMITTED AT ZONE 2 CHARGES SINCE
EDGEWOOD ARSENAL IS APPROXIMATELY 18 MILES FROM THE REMINGTON OFFICE.'
IN YOUR LETTER OF AUGUST 10, 1965, REFERRED TO ABOVE, MORE DETAILED
INFORMATION ON THE FIRST THREE REASONS WAS GIVEN. IT IS POINTED OUT
THAT DUE TO AN ERROR OF YOUR BALTIMORE SERVICE MANAGER, MR. JAMES B.
MITCHELL, THE PRICE OF $31.44 WAS INADVERTENTLY REPEATED FOR ALL ITEMS
AFTER ITEM 5 WHILE PREPARING THE BID, WHEREAS THE PRICE OF $31.44 SHOULD
HAVE CHANGED FROM $31.44 TO $52.80 WHEN THE MODEL NUMBER CHANGED AT ITEM
44. IT IS ALSO CONTENDED THAT YOU WILL BE OBLIGATED TO REDUCE YOUR
PRICES UNDER THE TERMS OF GENERAL SERVICES ADMINISTRATION CONTRACT
GS-OOS-54646 IF YOU PERFORM THE SERVICES AT EDGEWOOD ARSENAL AT THE
LOWER PRICES QUOTED IN YOUR BID. ADDITIONALLY, YOU POINT OUT THAT THE
CONTRACTOR'S SIGNATURE ON INVITATION FOR BIDS NO. AMC (A/-18-035-65-974
WAS AN UNAUTHORIZED SIGNATURE, SINCE ONLY THE BRANCH MANAGER HAS THE
AUTHORITY TO SIGN CONTRACTS ON BEHALF OF YOUR COMPANY.
AFTER REQUESTING SERVICES FROM YOUR COMPANY PURSUANT TO THE TERMS OF
PURCHASE ORDER NO. 01-18-035-C5-20353 (A) AND RECEIVING ADVICE THAT
SERVICES AT THE CONTRACT RATES WOULD NOT BE PROVIDED, IT WAS DETERMINED
BY THE CONTRACTING OFFICER THAT YOUR COMPANY WAS IN DEFAULT OF THE TERMS
OF THE PURCHASE ORDER. NOTWITHSTANDING YOUR REQUEST OF AUGUST 10 TO
THIS OFFICE, ON AUGUST 13, 1965, A FORMAL NOTICE OF TERMINATION FOR
DEFAULT WAS ISSUED AND YOUR COMPANY WAS SO ADVISED.
IN OUR DECISION OF AUGUST 20, 1964, B-154765, IT WAS STATED THAT THE
PREPARATION OF A BID IS THE RESPONSIBILITY OF THE BIDDER, AND A
UNILATERAL ERROR RESULTING FROM NEGLIGENCE IN THE PREPARATION OF THE BID
IS INSUFFICIENT GROUNDS FOR EITHER RESCISSION OR REFORMATION OF A
CONTRACT. IT IS OUR OPINION THAT THE ALLEGED ERROR OF YOUR EMPLOYEE, IN
TYPING THE INCORRECT NUMBERS FOR CERTAIN ITEMS IN IFB NO. AMC
(A/-18-035-65-974, MUST BE CLASSIFIED AS A UNILATERAL ERROR, SINCE THE
GOVERNMENT NEITHER CONTRIBUTED TO, OR KNEW OF, THE ERROR. ALTHOUGH IT
WOULD APPEAR THAT THE CONTRACTING OFFICER SUSPECTED THAT AN ERROR HAD
BEEN COMMITTED WHEN HE OBSERVED THAT THERE WAS NO DIFFERENCE IN THE BID
PRICES FOR SERVICES ON ADDING MACHINES AND CALCULATORS, THE SUBSEQUENT
ADVICE BY MR. MITCHELL THAT THE PRICES SUBMITTED WERE FOR MACHINES
LOCATED IN ZONE 1 AND WERE BASED ON SERIAL NUMBER RATHER THAN MODEL
NUMBER IS ENOUGH TO ABSOLVE THE CONTRACTING OFFICER OF CONSTRUCTIVE
NOTICE OF THE ERRORS. BASED ON THE FOREGOING WE MUST CONCLUDE THAT THE
ALLEGED ERRORS IN THE BID PRICES DO NOT AFFORD A PROPER BASIS UPON WHICH
YOUR COMPANY MAY BE GRANTED RELIEF BY EITHER RESCISSION OR REFORMATION
OF THE CONTRACT.
WITH RESPECT TO CONTRACT NO. GS-OOS-54646 BETWEEN YOUR COMPANY AND
THE GENERAL SERVICES ADMINISTRATION, YOU ADVISE THAT THE TERMS OF THAT
CONTRACT OBLIGATE YOU TO KEEP THE SAME PRICES FOR THE SAME SERVICES FOR
EACH AGENCY INVOLVED, AND YOU CONTEND THAT YOU SHOULD NOT BE REQUIRED TO
SERVICE THE MACHINES AT EDGEWOOD ARSENAL AT YOUR BID PRICES SINCE
PERFORMANCE AT SUCH REDUCED PRICES WOULD COMPEL YOUR COMPANY TO REDUCE
ITS PRICES FOR ALL GOVERNMENT AGENCIES INVOLVED IN THE GSA CONTRACT.
CONTRACT GS-OOS-54646 IS AN INDEFINITE FEDERAL SUPPLY SCHEDULE
CONTRACT FOR OFFICE MACHINES AND SERVICES WHICH WAS ENTERED INTO ON
APRIL 9, 1965, FOR THE CONTRACT PERIOD OF JULY 1, 1965 TO JUNE 30, 1966.
AMONG THE SERVICES TO BE PROVIDED BY CONTRACT GS-OOS-546 ARE
MAINTENANCE SERVICES FOR REMINGTON ADDING AND CALCULATING MACHINES
SIMILAR TO THE MAINTENANCE SERVICES TO BE PROVIDED BY PURCHASE ORDER NO.
01-18-035-C5-20353 (A). THE PRICES FOR THESE SERVICES UNDER CONTRACT
GS-OOS-54646 ARE BASED ON THE PHYSICAL LOCATION OF THE MACHINES
(DESIGNATED ON A ZONE BASIS), THE MODEL NUMBER OF THE MACHINE, AND THE
NUMBER OF MACHINES LOCATED IN THE SAME BUILDING. PRICE REDUCTIONS ARE
PROVIDED FOR IN CONTRACT GS-OOS-54646 BY THE STANDARD CLAUSE ENTITLED
"PRICE REDUCTIONS" SET FORTH IN GSA FORM 1424, AND BY PARAGRAPH 9 OF THE
SPECIAL PROVISIONS, WHEN THE CONTRACTOR SELLS SERVICES AT REDUCED PRICES
TO EITHER A FEDERAL SUPPLY AGENCY OR TO CUSTOMERS GENERALLY.
ALTHOUGH THE TERMS OF CONTRACT GS-OOS-54646 WOULD APPEAR TO REQUIRE A
PRICE REDUCTION IF YOUR COMPANY IS REQUIRED TO REDUCE PRICES FOR THE
SAME SERVICES UNDER PURCHASE ORDER NO. 01-18-035-C5-20353 (A), THIS
FACT HAS NO RELEVANCY TO THE ISSUE PRESENTLY HERE FOR DECISION. THE
CONTRACTS ARE MUTUALLY EXCLUSIVE AND THE OBLIGATION OF YOUR COMPANY TO
KEEP UNIFORMITY OF PRICES UNDER YOUR GENERAL SERVICES ADMINISTRATION
CONTRACT CANNOT BE PLEADED AS A BAR TO ENFORCEMENT OF THE LEGAL RIGHTS
OF THE GOVERNMENT UNDER THE ARMY'S PURCHASE ORDER NO.
01-18-035-C5-20353 (A).
CONCERNING YOUR ADVICE THAT THE SIGNATURE ON IFB NO. MAC
(A/-18-035-65-974 IS AN UNAUTHORIZED SIGNATURE, SINCE ONLY THE BRANCH
MANAGER HAS THE AUTHORITY TO SIGN CONTRACTS OR COMMIT THE COMPANY TO
BINDING CONTRACTS, THE BID WAS SIGNED ON BEHALF OF YOUR COMPANY BY JAMES
B. MITCHELL, BRANCH CED MANAGER OF YOUR LUTHERVILLE, MARYLAND, OFFICE.
THE RECORDS INDICATE THAT THIS SAME INDIVIDUAL SIGNED IFB NO. AMC
(A/-18-035-64-872 ON BEHALF OF YOUR COMPANY FOR THE SAME SERVICES FOR
THE PREVIOUS YEAR. FURTHERMORE, AT THE TIME OF THE BID OPENING FOR IFB
NO. AMC (A/-18-035-65-974, REPRESENTATIVES OF YOUR COMPANY WERE PRESENT
BUT FAILED TO GIVE ANY INDICATION THAT THE SIGNER LACKED THE NECESSARY
AUTHORITY TO BIND YOUR COMPANY.
IT IS A WELL-ESTABLISHED RULE IN THE LAW OF AGENCY THAT WHEN A
PRINCIPAL PERMITS ANOTHER TO ACT ON BUSINESS MATTERS IN HIS NAME, OR
APPARENTLY IN HIS BEHALF, THE PRINCIPAL IS BOUND BY THE DOCTRINE OF
APPARENT AUTHORITY AS IF THE ACT WAS COMMITTED WITH EXPRESS AUTHORITY
(SEE SECTION 277 OF "WILLISTON OF CONTRACTS").
UNDER THE CIRCUMSTANCES PRESENTED THERE IS NO EVIDENCE TO INDICATE
THAT THE GOVERNMENT KNEW OF ANY LACK OF AUTHORITY ON THE PART OF MR.
MITCHELL. IN FACT, HIS PREVIOUS SIGNING OF AN IFB, AND THE FAILURE OF
YOUR REPRESENTATIVES TO DISAVOW THE BID AT BID OPENING, TEND TO AFFIRM
HIS APPARENT AUTHORITY. IT, THEREFORE, APPEARS THAT THE ACTION OF YOUR
EMPLOYEE IN SIGNING IFB NO. AMC (A/-18-035-65-974 FALLS WITHIN THE
APPARENT AUTHORITY RULE, AND THEREFORE PRESENTS NO BAR TO THE LEGAL
ENFORCEMENT OF THE PROVISIONS OF PURCHASE ORDER NO. 01-18-035-05-20353
(A) BY THE GOVERNMENT.
ACCORDINGLY, YOU ARE ADVISED THAT WE FIND NO LEGAL BASIS FOR
RESCISSION OR REFORMATION OF THE PROVISIONS OF PURCHASE ORDER NO.
01-18-035-C5-20353 (A), AND YOUR REQUEST FOR SUCH ACTION MUST THEREFORE
BE DENIED.
B-157523, NOV. 4, 1965
TO U.S. NAVY FINANCE CENTER:
IN YOUR LETTER OF AUGUST 6, 1965, YOU INQUIRE AS TO THE BASIS OF
GENERAL ACCOUNTING OFFICE CLAIMS DIVISION CERTIFICATION DATED APRIL 16,
1965, ALLOWING CHIEF WARRANT OFFICER ROBERT F. BONAMARTE, USN, RETIRED,
INCREASED DISABILITY RETIRED PAY FOR THE PERIOD APRIL 1, 1955, TO
NOVEMBER 30, 1964, BASED ON THE RULE OF THE SELIGA CASE, 137 CT.CL. 710
(1957).
IT IS SUGGESTED THAT MR. BONAMARTE'S RETIRED PAY STATUS IS GOVERNED
BY THE HOLDING OF THIS OFFICE IN DECISION OF MARCH 17, 1960, B-141193,
AND THE RULE OF THE FAGAN (GOVER) DECISION OF MAY 4, 1960, 149 CT.CL.
716.
UPON REVIEW OF THE MATTER IT HAS BEEN CONCLUDED THAT YOUR LETTER
CORRECTLY OUTLINES MR. BONAMARTE'S RETIRED PAY STATUS EFFECTIVE FROM
OCTOBER 1, 1949. ACCORDINGLY, INSTRUCTIONS ARE BEING ISSUED THIS DATE
TO OUR CLAIMS DIVISION TO ADVISE MR. BONAMARTE THAT HE WAS OVERPAID IN
THE CERTIFICATION OF APRIL 16, 1965. A COPY OF CLAIMS DIVISION LETTER
TO MR. BONAMARTE SHOWING THE AMOUNT OVERPAID HIM WILL BE FORWARDED TO
YOUR OFFICE FOR USE IN CONNECTION WITH THE PROVISIONS OF 5 U.S.C. 46D.
B-157664, NOV. 4, 1965
TO MR. FREDERICK G. BUHR:
FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25, 1965, IN WHICH
YOU SAY THAT THE U.S. NAVY FINANCE CENTER, CLEVELAND, OHIO, HAS ADVISED
YOU THAT YOUR RETIRED PAY WAS ADJUSTED UNDER METHOD (B) OF SECTION 511
OF THE CAREER COMPENSATION ACT OF 1949, APPROVED OCTOBER 12, 1949, CH.
681, 63 STAT. 829, 37 U.S.C. 311 (1952 ED.), EFFECTIVE FROM NOVEMBER 1,
1963, AT $195.76 A MONTH, AND THAT SUCH AMOUNT IS WHOLLY TAXABLE. YOU
ASSERT THAT YOU WERE RETIRED FOR PHYSICAL DISABILITY INCURRED WHILE IN
RECEIPT OF BASIC PAY AND REQUEST THAT ACTION BE TAKEN TO PLACE YOUR
RETIRED PAY "BACK IN THE INCOME TAX EXEMPT CATEGORY.' THE ENCLOSURES
WHICH ACCOMPANIED YOUR LETTER INCLUDED A COPY OF A LETTER DATED FEBRUARY
25, 1947, IN WHICH THE BUREAU OF MEDICINE AND SURGERY, DEPARTMENT OF THE
NAVY, ADVISED YOU THAT YOUR MEDICAL RECORD ON FILE IN THAT BUREAU SHOWED
THAT YOU WERE PLACED ON THE RETIRED LIST ON APRIL 1, 1941, BY REASON OF
PHYSICAL DISABILITY INCURRED IN LINE OF DUTY.
THE DEPARTMENT OF THE NAVY HAS REPORTED TO US THAT WHEN YOU WERE
TRANSFERRED TO THE FLEET RESERVE ON AUGUST 31, 1934, YOU HAD COMPLETED
MORE THAN 20 YEARS OF SERVICE. YOU SUBSEQUENTLY SERVED ON ACTIVE DUTY
FROM JUNE 26, 1940, TO MARCH 10, 1941, AND WERE RETIRED FOR PHYSICAL
DISABILITY ON APRIL 1, 1941. YOU WERE RECALLED TO ACTIVE DUTY ON MARCH
1, 1944, AND SERVED UNTIL FEBRUARY 9, 1945, WHEN YOU WERE RETURNED TO
THE RETIRED LIST. IT APPEARS THAT YOUR RETIREMENT WAS EFFECTED UNDER
THE PROVISIONS OF TITLE II OF THE NAVAL RESERVE ACT OF 1938, APPROVED
JUNE 25, 1938, CH. 690, 52 STAT. 1178, AND THAT YOUR RETIRED PAY WAS
COMPUTED AS THERE PROVIDED.
YOUR LETTER OF MAY 31, 1963, ADDRESSED TO THE CHIEF OF NAVAL
PERSONNEL, CONTAINED THE OLLOWING:
"1. I RESPECTFULLY REQUEST THAT I BE FURNISHED A COMPLETE STATEMENT
OF SERVICE.
"2. I HAVE BEEN PAID UNDER THE SAVED PAY CLAUSE NOW FOR A NUMBER OF
YEARS. IT IS NOW ($180.28) PER MONTH, GROSS.
"3. SEVERAL OF MY SHIPMATES HAVE PUT IN CLAIMS AND HAVE RECEIVED
SEVERAL HUNDRED DOLLARS BACK PAY.'
THE DEPARTMENT OF THE NAVY CONSIDERED YOUR LETTER AS A CLAIM FOR
ADDITIONAL RETIRED PAY AND ADVISED YOU THAT BEFORE TAKING ANY ACTION ON
SUCH CLAIM IT WOULD BE NECESSARY FOR YOU TO FURNISH A CERTIFICATION,
OVER YOUR PERSONAL SIGNATURE, STATING WHETHER OR NOT YOU WERE, OR EVER
HAD BEEN, A PETITIONER BEFORE THE COURT OF CLAIMS FOR AN INCREASE IN
RETIRED PAY. AFTER THE RECEIPT OF YOUR CERTIFICATION, DATED SEPTEMBER
25, 1963, THAT YOU WERE NOT THEN, AND HAD NEVER BEEN, A PETITIONER
BEFORE THE COURT OF CLAIMS, THE CASE WAS FORWARDED TO THE CLAIMS
DIVISION OF OUR OFFICE FOR CONSIDERATION.
SUBSEQUENTLY, OUR CLAIMS DIVISION OBTAINED FROM THE BUREAU OF
MEDICINE AND SURGERY, DEPARTMENT OF THE NAVY, A REPORT, DATED FEBRUARY
18, 1964, WHICH READS, IN PERTINENT PART, AS FOLLOWS:
"A REVIEW OF BUHR'S SERVICE MEDICAL RECORD REVEALS THAT ON 31 AUGUST
1934 HE WAS GIVEN A PHYSICAL EXAMINATION INCIDENT TO HIS TRANSFER TO THE
FLEET NAVAL RESERVE AND RELEASE FROM ACTIVE DUTY. AT THE TIME OF THIS
EXAMINATION NO DISQUALIFYING DEFECTS WERE NOTED. IN 1940 BUHR WAS GIVEN
A PHYSICAL EXAMINATION TO DETERMINE HIS FITNESS FOR RECALL TO ACTIVE
DUTY. A HISTORY OF CHRONIC CHOLECYSTITIS WAS NOTED ON THE REPORT OF
PHYSICAL EXAMINATION. NOTWITHSTANDING, HE WAS RECALLED TO ACTIVE DUTY.
SUBSEQUENT TO HIS RECALL TO ACTIVE DUTY, SYMPTOMATOLOGY OF CHOLECYSTITIS
RECURRED AND ON 22 JANUARY 1941 BUHR WAS GIVEN A PHYSICAL EXAMINATION TO
DETERMINE HIS FITNESS FOR RETENTION ON ACTIVE DUTY. AS A RESULT OF THAT
EXAMINATION, THIS BUREAU ON 17 FEBRUARY 1941 RECOMMENDED THAT BUHR BE
RELEASED FROM ACTIVE DUTY AND THAT HIS NAME BE PLACED ON THE RETIRED
LIST. THE RECOMMENDATION WAS APPROVED AND ON 1 APRIL 1941 BUHR'S
RETIREMENT WAS EFFECTED. IN NOVEMBER BUHR WAS RECALLED TO ACTIVE DUTY
AND SERVED CONTINUALLY UNTIL FEBRUARY 1945 AT WHICH TIME HE WAS RELEASED
TO INACTIVE DUTY.
"IN VIEW OF THE ABOVE INFORMATION, IT IS THE OPINION OF THIS BUREAU
THAT THE DISABILITY FOR WHICH BUHR WAS RETIRED WAS NOT INCURRED WHILE HE
WAS ENTITLED TO RECEIVE BASIC PAY.'
IT WAS CONSIDERED BY OUR OFFICE THAT SUCH REPORT WAS MADE AFTER A
THOROUGH STUDY OF YOUR MEDICAL HISTORY, INCLUDING THE EARLIER REPORT OF
FEBRUARY 25, 1947, AND THE BASIS ON WHICH THE EARLIER REPORT WAS MADE.
IN THIS CONNECTION, IT MAY BE STATED THAT OUR OFFICE DOES NOT HAVE
AUTHORITY TO MAKE ANY DETERMINATION WITH RESPECT TO A MEMBER'S
DISABILITY WHICH WOULD CONFLICT WITH THAT MADE BY THE ADMINISTRATIVE
OFFICE. IN ANY EVENT THERE APPEARS TO BE NO BASIS TO QUESTION THE
DETERMINATION THAT THE DISABILITY FOR WHICH YOU WERE RETIRED
(CHOLECYSTITIS, INFLAMMATION OF THE GALL BLADDER) WAS NOT INCURRED WHILE
YOU WERE ENTITLED TO RECEIVE BASIC PAY, SINCE THERE WAS NO RECORD OF ANY
DISABILITY WHEN YOU WERE TRANSFERRED TO THE FLEET RESERVE IN 1934 AND
THE HISTORY OF SUCH DISABILITY RELATED MAINLY TO THE PERIOD WHILE YOU
WERE ON INACTIVE DUTY AS A FLEET RESERVIST. AS FAR AS THE MATTER OF
INCOME TAX IS CONCERNED, IT APPEARS IMMATERIAL AT THE PRESENT TIME
WHETHER OR NOT YOU WERE RETIRED FOR DISABILITY INCURRED IN LINE OF DUTY
WHILE ENTITLED TO RECEIVE BASIC PAY. YOU MADE NO ELECTION IN 1951 UNDER
SECTION 411 (A) OF THE 1949 ACT TO HAVE YOUR RETIRED PAY COMPUTED UNDER
SECTION 402 (D) OF THAT ACT, EVEN THOUGH YOU WERE THEN ADVISED THAT YOUR
DISABILITY WAS INCURRED ON ACTIVE DUTY, SINCE TAXWISE SUCH ELECTION
WOULD NOT HAVE BEEN TO YOUR ADVANTAGE DUE TO THE FACT THAT YOUR
DISABILITY WAS RATED AT ZERO PERCENT. SECTION 402 (H) OF THE 1949 ACT
PROVIDED, IN EFFECT, THAT ONLY THAT PART OF DISABILITY PAY COMPUTED ON
YEARS OF SERVICE WHICH IS NOT IN EXCESS OF THE AMOUNT PAYABLE IF
COMPUTED ON PERCENTAGE OF DISABILITY IS EXEMPT FROM PAYMENT OF INCOME
TAX. SEE 10 U.S.C. 1403 FOR PROVISIONS CURRENTLY IN EFFECT.
AFTER THE RECEIPT OF THE REPORT OF FEBRUARY 18, 1964, OUR CLAIMS
DIVISION ISSUED A SETTLEMENT VOUCHER IN YOUR FAVOR ON APRIL 24, 1964, ON
WHICH YOU WERE ALLOWED $621.49, REPRESENTING AN ADJUSTMENT OF RETIRED
PAY FOR THE PERIOD APRIL 1, 1955, TO OCTOBER 31, 1963, INCLUSIVE. THE
ALLOWANCE RESULTED FROM THE COMPUTATION OF YOUR RETIRED PAY FOR THAT
PERIOD UNDER THE YEARS OF SERVICE FORMULA OF METHOD (B), SECTION 511 OF
THE 1949 ACT, AND WAS BASED ON THE COURT OF CLAIMS DECISION OF MAY 4,
1960, IN THE CASE OF FAGAN, ET AL. (LEWIS L. GOVER, PLAINTIFF NO. 2) V.
UNITED STATES, 149 CT.CL. 716, HOLDING THAT THE ACT OF MARCH 31, 1955,
CH. 20, 69 STAT. 18, DID NOT TERMINATE THE RIGHT OF LONGEVITY RETIREES
RETIRED PRIOR TO OCTOBER 1, 1949, TO HAVE THEIR RETIRED PAY COMPUTED
UNDER EITHER METHOD (A) OR (B) OF SECTION 511, DEPENDING UPON WHICH
METHOD, FROM TIME TO TIME, RESULTED IN THE HIGHER RETIRED PAY.
SECTION 511 OF THE 1949 ACT PROVIDED (QUOTING FROM 37 U.S.C. 311
(1952 ED.) ( THAT A RETIRED MEMBER WITHIN ITS PROVISIONS---
"* * * SHALL BE ENTITLED TO RECEIVE RETIRED PAY * * * IN THE AMOUNT
WHICHEVER IS THE GREATER, COMPUTED BY ONE OF THE FOLLOWING METHODS: (A)
THE MONTHLY RETIRED PAY * * * IN THE AMOUNT AUTHORIZED * * * BY
PROVISIONS OF LAW IN EFFECT ON THE DAY IMMEDIATELY PRECEDING OCTOBER 12,
1949, OR (B) MONTHLY RETIRED PAY * * * EQUAL TO 2 1/2 PERCENTUM OF THE
MONTHLY BASIC PAY OF THE HIGHEST FEDERALLY RECOGNIZED RANK, GRADE, OR
RATING, WHETHER UNDER A PERMANENT OR TEMPORARY APPOINTMENT,
SATISFACTORILY HELD, BY SUCH MEMBER * * *, AS DETERMINED BY THE
SECRETARY CONCERNED, AND WHICH SUCH MEMBER * * * WOULD BE ENTITLED TO
RECEIVE IF SERVING ON ACTIVE DUTY IN SUCH RANK, GRADE, OR RATING,
MULTIPLIED BY THE NUMBER OF YEARS OF ACTIVE SERVICE CREDITABLE TO HIM *
* *.'
THE COURT OF CLAIMS IN THE CASE OF CLIFFORD MAURICE SHATTUCK,
PLAINTIFF NO. 8 IN BENSON, ET AL. V. UNITED STATES, CT.CL. NO. 372-59,
DECIDED JULY 17, 1964, HELD THAT PERSONS WHOSE RETIREMENTS BEFORE THE
PASSAGE OF THE CAREER COMPENSATION ACT WERE OCCASIONED BY DISABILITIES
WHICH WERE NOT ,SERVICE-INCURRED" WERE ENTITLED, JUST AS ANY LONGEVITY
RETIREE WOULD HAVE BEEN, TO HAVE THEIR RETIRED PAY RECOMPUTED
AUTOMATICALLY UNDER WHICHEVER OF THE TWO METHODS CONTAINED IN SECTION
511 THAT PRODUCED THE HIGHER RATE.
IN OUR DECISION OF JULY 17, 1957, B-131700, 37 COMP. GEN. 31, IT WAS
POINTED OUT ON PAGE 34 THAT:
"SECTION 511 * * * DOES NOT PROVIDE FOR AN ELECTION WITH RESPECT TO
RETIRED PAY. TWO METHODS OF COMPUTING RETIRED PAY ARE THERE PROVIDED
AND RETIRED MEMBERS WHOSE RIGHTS ARE GOVERNED BY SUCH PROVISIONS OF LAW
ARE ENTITLED TO HAVE THEIR RETIRED PAY COMPUTED BY THE METHOD, WHICH
PRODUCES THE GREATER AMOUNT OF RETIRED PAY. AFTER RECEIVING RETIRED PAY
COMPUTED BY ONE METHOD, IF CONDITIONS CHANGE IN SUCH A MANNER THAT A
RETIRED MEMBER'S PAY WOULD INCREASE BY COMPUTING HIS RETIRED PAY UNDER
THE OTHER METHOD, SUCH RECOMPUTATION WAS AUTHORIZED AND REQUIRED UNDER
SECTION 511 WITHOUT ANY ELECTION ON HIS PART.'
THE COURT OF CLAIMS IN THE FAGAN DECISION APPROVED THE INTERPRETATION
PLACED BY OUR OFFICE ON SECTION 511 RETIRED PAY--- AUTOMATIC
RECOMPUTATION AND NO ELECTION REQUIRED OR PERMITTED BETWEEN METHODS (A)
AND (B) THEREUNDER. WE FIND NOTHING IN THE SHATTUCK DECISION WHICH
SUGGESTS THAT AN INDIVIDUAL IN SUCH CIRCUMSTANCES HAS ANY RIGHT OF
ELECTION BETWEEN METHODS (A) AND (B) OF SECTION 511.
THE ACTION TAKEN BY OUR OFFICE ON YOUR CLAIM ON APRIL 24, 1964, WAS
IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF LAW AS CONSTRUED BY THE
COURT OF CLAIMS IN THE FAGAN AND SHATTUCK CASES, AND WE FIND NO
AUTHORITY FOR ALTERING OR CANCELING SUCH ACTION SO AS TO PLACE YOUR
RETIRED PAY ,BACK IN THE INCOME TAX EXEMPT CATEGORY.'
B-157901, NOV. 4, 1965
TO HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS
ADMINISTRATION:
REFERENCE IS MADE TO LETTER DATED OCTOBER 21, 1965, WITH ENCLOSURES,
FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, FILE 074B, REQUESTING OUR
DECISION AS TO WHETHER ITEM 9 OF PURCHASE ORDER NO. 66-HI-40373, ISSUED
TO ISIS FOODS, INC., MAY BE CANCELED.
THE RECORD SHOWS THAT PURSUANT TO ITS BID ON ITEM 9 OF INVITATION NO.
M4-117-66, AWARD OF CONTRACT WAS MADE ON OCTOBER 1, 1965, UNDER THE
SUBJECT PURCHASE ORDER TO ISIS FOODS, INC., FOR 1200 CASES OF GRADE C
CANNED APPLES AT $4.05 PER CASE, F.O.B. KANSAS CITY, MISSOURI.
THEREAFTER, BY LETTER DATED OCTOBER 4, 1965, ISIS NOTIFIED THE
PURCHASING ACTIVITY THAT AN ERROR ON THE SUBJECT ITEM 9 OF THE
INVITATION WAS MADE IN "OUR COMPUTATION ON OUR WORK SHEET; " AND ASKED
THAT THE ITEM BE CANCELED. ISIS ALSO POINTED OUT THAT IT WAS AWARDED A
CONTRACT FOR APPLESAUCE FOR A PRICE HIGHER THAN THE APPLES WHICH CLEARLY
INDICATED THAT THE PRICE OF THE APPLES WAS IN ERROR. WITH RESPECT TO
SUCH ALLEGATION OF ERROR IT IS ADMINISTRATIVELY REPORTED THAT AN
EXAMINATION OF THE ABSTRACT OF BIDS DISCLOSED THAT 16 FIRMS SUBMITTED
BIDS FOR THE SUBJECT ITEM RANGING FROM A LOW BID OF $4.05 DELIVERED, A
SECOND LOW BID OF $4.30 F.O.B. PLANT OR $4.77666 DELIVERED, TO THE
HIGHEST BID OF $5.215 F.O.B. WATSONVILLE, CALIFORNIA. THE DIRECTOR,
SUPPLY MANAGEMENT SERVICE, IS OF THE VIEW THAT THE DISPARITY BETWEEN THE
BID OF ISIS AND THE OTHER BIDS RECEIVED SHOULD HAVE PLACED THE
CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. IN ADDITION,
THE CONTRACTING OFFICER'S SUMMARIES FOR PURCHASES BETWEEN JUNE 1964 AND
OCTOBER 1965 SUBSTANTIATE ISIS' CONTENTION THAT AN ERROR WAS COMMITTED,
SINCE THE AVERAGE COST OF GRADE C APPLIES IS APPROXIMATELY $0.82 GREATER
THAN GRADE A APPLESAUCE FOR IDENTICAL SIZE CASES OF 6--- NO. 10 CANS.
IN VIEW OF THE FOREGOING, THE DIRECTOR, SUPPLY MANAGEMENT SERVICE,
RECOMMENDS CANCELLATION OF THE 1200 CASES OF ITEM 9, TOTALING $4,860
FROM PURCHASE ORDER NO. 66-HI-40373. WE CONCUR IN THIS RECOMMENDATION.
IN THE CIRCUMSTANCES, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT
VERIFICATION.
ACCORDINGLY, THE CANCELLATION RECOMMENDED BY THE DIRECTOR, SUPPLY
MANAGEMENT SERVICE, MAY BE MADE.
B-157505, NOV. 3, 1965
TO IRA GELBER FOOD SERVICES, INC. :
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED AUGUST 18, 1965,
PROTESTING AWARD OF ANY CONTRACT UNDER ARMY INVITATION FOR BIDS NO.
MD41-244-66-1 TO TRANSPORT SERVICES, INC.
THE ABOVE INVITATION WAS ISSUED BY THE BROOKE ARMY MEDICAL CENTER,
FORT SAM HOUSTON, TEXAS, ON JULY 12, 1965, FOR THE PROCUREMENT OF
NONPERSONAL SERVICES--- KITCHEN POLICE FOR MESS NO. 2 AND MESS NO. 4 AT
MEDICAL FIELD SERVICE SCHOOL, SAME INSTALLATION. IT PROVIDED THAT BIDS
WERE TO BE OPENED AT 3:30 P.M., C.S.T., ON AUGUST 10, 1965. YOUR
COMPANY'S BID WAS THE LOWEST OF SIX RECEIVED AND OPENED AT THAT TIME.
ON THE SAME DATE, TRANSPORT SERVICES, INC., INQUIRED BY TELEPHONE AS TO
THE STATUS OF ITS BID. UPON BEING INFORMED THAT NO BID WAS RECEIVED
FROM ITS FIRM, IT CLAIMED A DELAY IN THE MAILS. TRANSPORT'S BID WAS
RECEIVED AUGUST 11, 1965, AND THE TIME OF MAILING AND THE EXPECTED
ARRIVAL TIME WERE INVESTIGATED. THE POSTMASTER, CORPUS CHRISTI, TEXAS,
OFFICIALLY CONFIRMED BY WRITTEN STATEMENT THAT THE TRANSPORT BID WAS
MAILED BY CERTIFIED AIRMAIL FROM CORPUS CHRISTI PRIOR TO 4:30 P.M. ON
AUGUST 9, 1965. OFFICIAL AIRMAIL DISPATCH TIMES FROM CORPUS CHRISTI TO
SAN ANTONIO, TEXAS, SHOWED THAT AIRMAIL DISPATCHED BY 9:20 P.M. ON
AUGUST 9, 1965, WOULD HAVE ARRIVED IN SAN ANTONIO BY 10:37 P.M., SAME
DATE, IN TIME TO BE INCLUDED IN THE MORNING (9 A.M.) DELIVERY ON THE
FOLLOWING DAY. UPON RECEIPT OF OFFICIAL WRITTEN CONFIRMATION OF THE
NORMAL SCHEDULES OF MAILING AND DELIVERY TIMES INVOLVED, THE BID WAS
DETERMINED TO BE ELIGIBLE FOR CONSIDERATION AND WAS OPENED ON AUGUST 11,
1965, AND WAS FOUND TO BE THE LOWEST FAIR AND REASONABLE BID PRICE
RECEIVED. YOUR PROTEST FOLLOWED, BASED ON SUCH VARIOUS ALLEGATIONS AS
ILLEGAL RECEIPT OF A LATE BID IN ACCORDANCE WITH THE INVITATION, THAT
TRANSPORT WAS A SURE LOSER NOT QUALIFIED TO HANDLE SANITATION AND THAT
IT WAS NOT FINANCIALLY CAPABLE.
PARAGRAPH 2-303.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR)
(SEE, ALSO, CLAUSE 41 OF THE ADDITIONAL GENERAL PROVISIONS OF THE
INVITATION FOR BIDS) PROVIDES, IN PERTINENT PART, AS FOLLOWS:
"2-303.2 CONSIDERATION FOR AWARD. A LATE BID SHALL BE CONSIDERED FOR
AWARD ONLY IF:
"/I) IT IS RECEIVED BEFORE AWARD; AND EITHER
"/II) IT WAS 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 THAT THE LATENESS WAS DUE SOLELY TO A DELAY IN THE
MAILS (BASED ON EVIDENCE PURSUANT TO 2-303.3), OR TO A DELAY BY THE
TELEGRAPH COMPANY FOR WHICH THE BIDDER WAS NOT RESPONSIBLE * * *"
IN ADDITION, APSR 2-303.3 (C) PROVIDES AS FOLLOWS:
"/C) DELIVERY TIME. INFORMATION CONCERNING THE NORMAL TIME FOR MAIL
DELIVERY SHALL BE OBTAINED BY THE PURCHASING ACTIVITY FROM THE
POSTMASTER, SUPERINTENDENT OF MAILS, OR A DULY AUTHORIZED REPRESENTATIVE
FOR THAT PURPOSE, OF THE POST OFFICE SERVING THAT ACTIVITY. WHEN TIME
PERMITS, SUCH INFORMATION SHALL BE OBTAINED IN WRITING.'
SINCE EVIDENCE OBTAINED FROM SOURCES AUTHORIZED BY THE INVITATION AND
THE ABOVE REGULATION ESTABLISHED THAT THE DELAY IN RECEIPT OF
TRANSPORT'S BID WAS DUE SOLELY TO A DELAY IN THE MAILS FOR WHICH THE
BIDDER WAS NOT RESPONSIBLE, THE ADMINISTRATIVE ACTION IN RECEIVING ITS
BID FOR CONSIDERATION OF AWARD WAS PROPER. SINCE THE BID WAS FOUND TO
BE THE LOWEST FAIR AND REASONABLE BID RECEIVED, EVALUATION OF THE BID
WAS IN ORDER AND A CONTRACT WAS AWARDED TO TRANSPORT SERVICES, INC., ON
AUGUST 31, 1965.
PRIOR TO AWARD THE BID PRICES OF TRANSPORT SERVICES, INC., WERE
VERIFIED WITH THAT FIRM. ITS MARGIN OF PROFIT ON THE CONTRACT IS
IRRELEVANT TO AN AWARD FOR, WHILE ITS BID IS THE LOWEST, IT HAS NOT BEEN
FOUND TO BE SO LOW AS TO PRECLUDE SUCCESSFUL PERFORMANCE.
YOUR ALLEGATIONS CONCERNING THE QUALIFICATION OF TRANSPORT SERVICES
TO HANDLE A CONTRACT INVOLVING THE HIGH DEGREE OF SANITATION REQUIRED IN
A MILITARY FOOD SERVICE OPERATION APPEAR TO BE WITHOUT FOUNDATION AS THE
REQUIREMENT IN THIS RESPECT IS FULLY SET FORTH IN THE CONTRACT. ALL
CONTRACTOR PERSONNEL ARE REQUIRED TO HAVE FOOD HANDLERS' PERMITS PRIOR
TO COMMENCEMENT OF WORK. MEDICAL CERTIFICATES WILL BE REQUIRED TO BE
COORDINATED WITH THE CHIEF, PREVENTIVE MEDICINE, FORT SAM HOUSTON,
TEXAS. WE FIND NOTHING IN THE RECORD BEFORE US TO INDICATE THAT THE
GOVERNMENT WILL NOT REQUIRE PERFORMANCE IN ACCORDANCE WITH THE TERMS OF
THE CONTRACT AND WILL NOT EXERCISE SUCH RIGHTS RESERVED TO IT
THEREUNDER.
A PREAWARD SURVEY CONDUCTED TO DETERMINE THE FINANCIAL CONDITION OF
TRANSPORT SERVICES, INC., HAS REVEALED THAT THE COMPANY IS SOLVENT AND
MAINTAINS SUFFICIENT CASH ON HAND TO COMPLETELY COVER ITS CURRENT
LIABILITIES. THE CONTRACTOR'S RATIO OF ASSETS TO LIABILITIES HAS BEEN
FOUND SATISFACTORY BY THE PROCUREMENT OFFICE AND ITS ADMINISTRATIVE
ABILITIES ARE SATISFACTORILY EVIDENCED BY PRIOR PERFORMANCES ON OTHER
CONTRACTS.
IT MAY BE STATED THAT THE SELECTION OF CONTRACTORS AND THE
DETERMINATION OF THEIR QUALIFICATIONS IS PRIMARILY THE RESPONSIBILITY OF
THE ADMINISTRATIVE OFFICERS CONCERNED AND, IN THE ABSENCE OF A SHOWING
OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE ACTION TAKEN--- AND
NONE IS SHOWN HERE--- WE ARE NOT REQUIRED TO OBJECT THERETO.
B-156075, NOV. 2, 1965
TO MRS. DORETHA STAGGS:
REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 2, 1965, CONCERNING THE
ARREARS OF PAY AND SIX MONTHS' DEATH GRATUITY IN THE CASE OF YOUR LATE
BROTHER, TECHNICAL SERGEANT LEROY CRUMPLER, UNITED STATES AIR FORCE, WHO
DIED FEBRUARY 11, 1963.
THE RECORD SHOWS THAT SERGEANT CRUMPLER DESIGNATED HIS FATHER AND HIS
SISTER, MRS. LORENE SANDERS, MAGNOLIA, ARKANSAS, AS BENEFICIARIES WITH
EACH TO RECEIVE ONE-HALF OF THE AMOUNTS DUE, AND THAT HIS FATHER
PREDECEASED HIM. ALSO, THE RECORD INDICATES THAT MRS. SANDERS WAS PAID
ONE-HALF OF THE ARREARS OF PAY DUE SERGEANT CRUMPLER AT THE DATE OF HIS
DEATH, BUT THAT THE REMAINING ONE-HALF HAS NOT BEEN PAID INASMUCH AS HIS
FATHER PREDECEASED HIM. ALSO, SINCE THE RECORD INDICATES THAT SERGEANT
CRUMPLER MAY BE SURVIVED BY A WIDOW, NO PAYMENT OF THE DEATH GRATUITY
HAS BEEN MADE.
YOU STATE THAT YOU HAVE BEEN APPOINTED ADMINISTRATRIX OF SERGEANT
CRUMPLER'S ESTATE BY THE PROBATE COURT OF COLUMBIA COUNTY, ARKANSAS, ON
MAY 17, 1965; THAT AS THE RESULT OF PUBLICATION OF AN OFFICIAL NOTICE
OF THE ADMINISTRATION OF HIS ESTATE ON MAY 18, 1965, ALL PERSONS HAVING
CLAIMS AGAINST THE ESTATE MUST EXHIBIT THEM WITHIN 6 MONTHS FROM THAT
DATE; AND THAT SUCH NOTICE WAS SENT TO THE PERSON CLAIMING TO BE
SERGEANT CRUMPLER'S WIDOW, MARY LOUISE CRUMPLER, AT HER LAST KNOWN
ADDRESS IN NEW JERSEY.
IN THIS CONNECTION, IT IS NOTED THAT THE NOTICE PROVIDED IN SECTION
62-1001, ARKANSAS STATUTES, 1947, IS A NOTICE TO CREDITORS OF THE
ESTATE, NOT TO HEIRS. SEE SECTION 62-1003. IF MARY LOUISE CRUMPLER IS
YOUR BROTHER'S WIDOW, SHE IS AN HEIR, NOT A CREDITOR, OF THE ESTATE.
YOU REQUEST "AN IMMEDIATE HEARING.'
SECTION 2771, TITLE 10, U.S. CODE, PROVIDES IN PART AS FOLLOWS:
"/A) IN THE SETTLEMENT OF THE ACCOUNTS OF A DECEASED MEMBER OF THE
ARMED FORCES WHO DIES AFTER DECEMBER 31, 1955, AN AMOUNT DUE FROM THE
ARMED FORCE OF WHICH HE WAS A MEMBER SHALL BE PAID TO THE PERSON HIGHEST
ON THE FOLLOWING LIST LIVING ON THE DATE OF DEATH:
"/1) BENEFICIARY DESIGNATED BY HIM IN WRITING TO RECEIVE SUCH AN
AMOUNT, IF THE DESIGNATION IS RECEIVED, BEFORE THE DECEASED MEMBER'S
DEATH, AT THE PLACE NAMED IN REGULATIONS TO BE PRESCRIBED BY THE
SECRETARY CONCERNED.
"/2) SURVIVING SPOUSE.
"/3) CHILDREN AND THEIR DESCENDANTS, BY REPRESENTATION.
"/4) FATHER AND MOTHER IN EQUAL PARTS OR, IF EITHER IS DEAD, THE
SURVIVOR.
"/5) LEGAL REPRESENTATIVE.
"/6) PERSON ENTITLED UNDER THE LAW OF THE DOMICILE OF THE DECEASED
MEMBER.'
SECTION 1477, TITLE 10, U.S. CODE, PROVIDES WITH RESPECT TO PAYMENT
OF THE SIX MONTHS' DEATH GRATUITY TO ELIGIBLE SURVIVORS IN PERTINENT
PART AS FOLLOWS:
"/A) A DEATH GRATUITY * * * SHALL BE PAID TO OR FOR THE LIVING
SURVIVOR HIGHEST ON THE FOLLOWING LIST:
"/1) HIS SURVIVING SPOUSE.
"/2) HIS CHILDREN * * * IN EQUAL SHARES.
"/3) IF DESIGNATED BY HIM, ANY ONE OR MORE OF THE FOLLOWING PERSONS:
"/A) HIS PARENTS OR PERSONS IN LOCO PARENTIS * * *.
"/B) HIS BROTHERS.
"/C) HIS SISTERS.
"/4) HIS PARENTS OR PERSONS IN LOCO PARENTIS * * * IN EQUAL SHARES.
"/5) HIS BROTHERS AND SISTERS IN EQUAL SHARES.'
IT WILL BE SEEN THAT PAYMENT OF THE ARREARS OF PAY DUE A DECEASED
MEMBER OF THE ARMED FORCES MAY BE MADE TO THE LEGAL REPRESENTATIVE OF
HIS ESTATE ONLY IF HE IS NOT SURVIVED BY A SPOUSE AND THAT NO PROVISION
IS MADE FOR PAYMENT OF THE SIX MONTHS' DEATH GRATUITY TO SUCH LEGAL
REPRESENTATIVE. ONE-HALF OF THE ARREARS OF PAY HAS BEEN PAID TO HIS
SISTER, LORENE CRUMPLER SANDERS, AS A DESIGNATED BENEFICIARY AND
THEREFORE SHE HAS RECEIVED ALL THE ARREARS OF PAY THAT MAY BE PAID TO
HER AS DESIGNATED BENEFICIARY. SINCE MARY LOUISE CRUMPLER HAS FILED A
CLAIM AS SURVIVING SPOUSE AND THE INFORMATION FURNISHED IN SUPPORT OF
SUCH CLAIM RAISES DOUBT AS TO WHETHER YOUR BROTHER WAS MARRIED ON THE
DATE OF HIS DEATH, THE INTERESTS OF THE UNITED STATES REQUIRE THAT
THE CONFLICTING CLAIMS BE RESOLVED BEFORE PAYMENT OF THE BALANCE OF
THE ARREARS OF PAY IS MADE. UNTIL IT IS ESTABLISHED THAT MARY LOUISE
CRUMPLER HAS ABANDONED HER CLAIM OR A DETERMINATION IS MADE BY A COURT
OF COMPETENT JURISDICTION THAT SHE IS OR IS NOT THE WIDOW OF THE
DECEASED MEMBER, NO SETTLEMENT MAY BE MADE BY THIS OFFICE. IN THIS
CONNECTION, YOUR ATTENTION IS INVITED TO SECTION 62-1301, ARKANSAS
STATUTES, 1947. THE LAST KNOWN ADDRESS OF MARY LOUISE CRUMPLER IS
GENERAL DELIVERY, CONWAY, ARKANSAS. THE COURT OF CLAIMS HAS RULED THAT
DOUBTFUL CLAIMS AGAINST THE UNITED STATES SHOULD BE DISALLOWED AND THE
CLAIMANTS LEFT TO THEIR REMEDIES IN THE COURTS. SEE LONGWILL V. UNITED
STATES, 17 CT.CL. 288 (1881) AND CHARLES V. UNITED STATES, 19 CT.CL.
316 (1884).
NO PAYMENT OF THE SIX MONTHS' DEATH GRATUITY MAY BE MADE TO YOU AS
LEGAL REPRESENTATIVE OF YOUR LATE BROTHER'S ESTATE. ON THE PRESENT
RECORD BEFORE THIS OFFICE NO PAYMENT OF THE BALANCE OF THE ARREARS OF
PAY MAY BE MADE TO YOU AS SUCH LEGAL REPRESENTATIVE.
THIS OFFICE HOLDS NO FORMAL HEARINGS AS SUCH. HOWEVER, YOU OR YOUR
ATTORNEY MAY PRESENT SUCH EVIDENCE, INFORMATION, OR ARGUMENTS AS YOU MAY
DEEM PERTINENT IN WRITING, OR PERSONALLY BEFORE THIS OFFICE AT ANY TIME
DURING REGULAR OFFICE HOURS MONDAY THROUGH FRIDAY. ANY EVIDENCE OR
ARGUMENTS PRESENTED WILL BE GIVEN CAREFUL CONSIDERATION.
B-156385, NOV. 2, 1965
TO SOUTHERN PACIFIC COMPANY:
FURTHER REFERENCE IS MADE TO YOUR LETTERS OF MARCH 16, 1965, FILES YM
85-109915-M AND YM 85-110713-M, IN EFFECT REQUESTING REVIEW OF THE
SETTLEMENTS DISALLOWING YOUR SUPPLEMENTAL BILLS FOR ADDITIONAL FREIGHT
CHARGES FOR TRANSPORTATION SERVICES FURNISHED UNDER GOVERNMENT BILLS OF
LADING B-2785995, DATED JANUARY 8, 1962; B-4638203, DATED JUNE 4, 1962;
AND B-4841617, DATED JULY 12, 1962.
THE ISSUE, AS INDICATED IN YOUR REQUESTS FOR REVIEW, RELATES TO THE
SHIPMENTS ON THE FIRST TWO BILLS OF LADING LISTED ABOVE, EACH OF WHICH
WAS ISSUED TO COVER THE MOVEMENT OF A SPRAY OUTFIT, TYPE MB-3, FROM THE
PLANT OF MANUFACTURE, CAMCO INDUSTRIES, INC., GALION, OHIO, TO OXNARD
AND VAN NUYS, CALIFORNIA, RESPECTIVELY. FOR SUCH SERVICE YOU ORIGINALLY
BILLED AND WERE PAID, PRIOR TO AUDIT BY THE GENERAL ACCOUNTING OFFICE,
PURSUANT TO THE PROVISIONS OF 49 U.S.C. 66, THE AMOUNT OF $1,767.92 ON
EACH OF THE TWO SHIPMENTS. UPON AUDIT OF THE VOUCHERS EVIDENCING SUCH
PAYMENTS OUR TRANSPORTATION DIVISION DETERMINED THE APPLICABLE CHARGES
ON EACH SHIPMENT TO BE $1,036.80 AND ISSUED NOTICE OF OVERCHARGE IN THE
AMOUNT OF $731.12 ON EACH SHIPMENT. UPON YOUR FAILURE TO MAKE PROMPT
REFUND, DEDUCTIONS WERE MADE FROM AMOUNTS DUE ON SUBSEQUENT BILLS. THE
OUTFITS WERE DESCRIBED ON THE BILLS OF LADING AS "VEHICLE, MOTOR,
FREIGHT," BUT BOTH BILLS SHOWED NOT ONLY A TRUCK CHASSIS NUMBER BUT ALSO
A SPRAY UNIT SERIAL NUMBER, THUS INDICATING THAT THE CARGO ACTUALLY
CONSISTED OF SOMETHING OTHER THAN A FREIGHT VEHICLE. THE BILLS OF
LADING ALSO CONTAINED CITATION TO CONTRACT AF 33/600/-39334.
THE CONTRACT AND OTHER AVAILABLE MATERIAL RELATING TO THE COMMODITY
REVEAL THAT IT CONSISTS OF A MOBILE SPRAYER, FOR DE-ICING AND
DE-CONTAMINATING AIRCRAFT. NEITHER THE SPRAYER NOR THE CHASSIS COULD BE
USED FOR THE INTENDED PURPOSE WITHOUT THE BENEFIT OF THE OTHER. SINCE
THIS SPRAYING APPARATUS IS A COMPLETE UNIT, EACH PART DEPENDENT UPON THE
OTHER FOR USE, AND SINCE NEITHER PART IS SUSCEPTIBLE OF USE ALONE
WITHOUT MODIFICATION AND RECONSTRUCTION, IT IS OUR VIEW THAT IT IS
PROPERLY RATABLE AS A SPRAYER, NOIBN, UNDER ITEM 5105, TRANSCONTINENTAL
FREIGHT BUREAU TARIFF 1-K, I.C.C. NO. 1668. ACCORDINGLY, THE
SETTLEMENTS DISALLOWING YOUR SUPPLEMENTAL BILLS WERE CORRECT AND THEY
ARE HEREBY SUSTAINED.
WE NOTE, HOWEVER, THE QUESTION OF THE PROPER CLASSIFICATION OF THE
MB-3 TYPE SPRAYER IS AT ISSUE IN SEABOARD AIR LINE RAILROAD COMPANY V.
UNITED STATES, COURT OF CLAIMS NO. 281-62, WHICH HAS BEEN REFERRED TO
THE INTERSTATE COMMERCE COMMISSION, WHERE THE CASE IS STILL PENDING
UNDER I.C.C. DOCKET 34489. SHOULD THE EVENTUAL RESULT IN THAT CASE
WARRANT IT, RECONSIDERATION OF THIS DECISION MAY BE REQUESTED BY YOU.
B-156430, NOV. 2, 1965
TO METRO-TEL CORPORATION:
YOUR LETTER OF OCTOBER 19, 1965, FURTHER PROTESTS THE CANCELLATION OF
INVITATION FOR BIDS NO. AMC (E/-36-039-65-306-5 (NO. 306-5) BASED ON "A
TECHNICALITY.' THE FACTS LEADING UP TO THE CANCELLATION AND THE
READVERTISEMENT WERE FULLY SET FORTH IN THE DECISION OF JUNE 9, 1965,
B-156430, AND THE RECONSIDERATION THEREOF OF OCTOBER 15, 1965, AND THEY
WILL NOT BE REPEATED HERE.
AS URGED IN YOUR PRESENT LETTER WE AGREE THAT IT WOULD HAVE BEEN
PREFERABLE FOR STELMA, INCORPORATED, TO HAVE PROTESTED THE DATA
REQUIREMENTS PRIOR TO THE OPENING OF BIDS AND THE REVEALMENT OF BID
PRICES. AS POINTED OUT IN THE DECISION OF JUNE 9, 1965, AND THE
RECONSIDERATION THEREOF OF OCTOBER 15, 1965, HOWEVER, THE CANCELLED
INVITATION WAS UNFAIR AND PREJUDICIAL BECAUSE THE "NOTE" UNDER PROVISION
W ON PAGE 55 OF THE BID SCHEDULE, REQUIRED CERTAIN
MANUFACTURING INFORMATION FROM ONE OR MORE BIDDERS NOT REQUIRED OF
OTHER BIDDERS. SINCE UNDER THE PROVISIONS OF THE ABOVE "NOTE" STELMA OR
ANY OTHER CONTRACTOR WHO USED HIS OWN CATALOG-STANDARD ITEMS WOULD HAVE
HAD TO FURNISH MANUFACTURING INFORMATION AND DRAWINGS WHEREAS OTHER
BIDDERS WHO DID NOT USE THEIR OWN CATAGOG-STANDARD ITEMS DID NOT, IT IS
CLEAR THAT THE INVITATION WAS PREJUDICIAL TO STELMA AND OTHER BIDDERS
SIMILARLY SITUATED. THEREFORE, OUR OFFICE HAD NO ALTERNATIVE BUT TO
AGREE WITH THE ADMINISTRATIVE ACTION IN CANCELLING THE INVITATION IN
ORDER TO PRESERVE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM WHICH
REQUIRES THAT ALL BIDDERS BE GIVEN AN OPPORTUNITY TO COMPETE ON AN EQUAL
BASIS.
REGARDING YOUR COMMENTS IN THE THIRD PARAGRAPH, PAGE ONE OF YOUR
LETTER CONCERNING PRACTICES OF SOME BIDDERS WITH RESPECT TO THE DATA
PRICING PROVISIONS PROVIDED FOR UNDER PARAGRAPH NO. 47 OF THE
"ADDITIONAL GENERAL CONTRACTUAL PROVISIONS," SUCH PROVISIONS WERE MADE
APPLICABLE TO ALL BIDDERS WHEREAS SOME OF THE PROVISIONS OF THE ABOVE
"NOTE" WERE MADE APPLICABLE ONLY TO ONE OR MORE BIDDERS. THEREFORE, IT
IS OBVIOUS THAT THE REQUIREMENTS OF THE "NOTE" DID NOT PERMIT
COMPETITORS TO COMPETE ON A COMMON AND EQUAL BASIS AND THAT SUCH
REQUIREMENTS WERE UNFAIR AND CREATED A SITUATION PREJUDICIAL TO ONE OR
MORE BIDDERS.
IT IS HOPED THAT THE FOREGOING WILL HELP TO EXPLAIN THE REASONS FOR
DENYING YOUR PROTEST.
B-157078, NOV. 2, 1965
TO LOGEL AND HOUCHIN:
WE REFER TO YOUR LETTER OF AUGUST 24, 1965, RELATIVE TO THE AWARD
UNDER THE LABOR SURPLUS AREA SET-ASIDE PORTION OF INVITATION FOR BIDS
NO. AMC (A/-18-035-65-698 ISSUED ON MAY 15, 1965, BY THE UNITED STATES
DEPARTMENT OF THE ARMY, EDGEWOOD ARSENAL, MARYLAND.
THE LABOR SUPRLUS AREA SET-ASIDE PORTION OF THE INVITATION COVERED A
QUANTITY OF 175 EACH DECONTAMINATING APPARATUS, M12, WITH GENERATOR AND
REGULATOR. ON JULY 29, 1965, IT WAS AWARDED TO DAVEY COMPRESSOR COMPANY
OF KENT, OHIO, A SELF-CERTIFIED SMALL BUSINESS CONCERN. DAVEY HAD
STATED IN ITS BID THAT IT WOULD INCUR MORE THAN 50 PERCENT OF THE
CONTRACT PRICE IN VARIOUS DESIGNATED AREAS OF PERSISTENT LABOR SURPLUS.
YOU OBJECT TO THE AWARD ON TWO GROUNDS. FIRST YOU CONTEND THAT DAVEY IS
NOT A SURPLUS LABOR AREA CONCERN BUT HAS SET UP LOCATIONS OUTSIDE KENT,
OHIO, MERELY TO QUALIFY FOR THE AWARD. THIS YOU REGARD AS A TOKEN BID
OR DEVICE, UNFAIR TO LEGITIMATE LABOR SURPLUS AREA CONCERNS. SECOND YOU
CONTEND THAT THE PRESENT SMALL BUSINESS DEFINITION OF 500 EMPLOYEES IS
MUCH TOO LARGE AND UNREALISTIC, SINCE A FIRM SUCH AS YOURS, OF 20 TO 30
EMPLOYEES CANNOT COMPETE AGAINST A CONCERN OF 499 EMPLOYEES.
GENERAL PROVISION NO. 41 OF THE INVITATION INCORPORATED THE "NOTICE
OF LABOR SUPRLUS AREA SET-ASIDE" CLAUSE PROVIDED FOR IN ASPR 1-804.2/C)
(NOV. 1964). PARAGRAPH (G) OF THE CLAUSE STATES AS FOLLOWS:
"/G) TOKEN BIDS. NOTWITHSTANDING THE PROVISIONS OF THIS NOTICE, THE
GOVERNMENT RESERVES THE RIGHT, IN DETERMINING ELIGIBILITY OR PRIORITY
FOR SET-ASIDE NEGOTIATIONS, NOT TO CONSIDER TOKEN BIDS OR OTHER DEVICES
DESIGNED TO SECURE AN UNFAIR ADVANTAGE OVER OTHER BIDDERS ELIGIBLE FOR
THE SET-ASIDE PORTION.'
A "LABOR SUPRLUS AREA CONCERN" WAS DEFINED (PARAGRAPH (D) (2) ( AS A
CONCERN THAT HAD AGREED TO PERFORM, OR CAUSE TO BE PERFORMED, A
SUBSTANTIAL PROPORTION OF A CONTRACT IN LABOR SURPLUS AREAS.
"SUBSTANTIAL PROPORTION" WAS DEFINED TO MEAN MORE THAN 50 PERCENT O
THE CONTRACT PRICE, TO BE PERFORMED EITHER BY THE CONCERN ITSELF OR BY
ITS FIRST-TIER SUBCONTRACTORS. ASPR 1-802 STATES THAT IT IS THE POLICY
OF THE DEPARTMENT OF DEFENSE TO AID LABOR SURPLUS AREAS "BY ENCOURAGING
PRIME CONTRACTORS TO PLACE SUBCONTRACTS WITH CONCERNS WHICH WILL PERFORM
SUBSTANTIALLY IN LABOR SURPLUS AREAS.' THE PURPOSE OF THIS PROGRAM IS TO
PLACE WORK WITHIN DEPRESSED AREAS. IT IS NOT IMPORTANT WHERE THE
CONTRACTOR MAINTAINS ITS HOME PLANT, SO LONG AS IT PERFORMS, OR CAUSES
TO BE PERFORMED, MOST OF THE CONTRACT WORK IN DEPRESSED AREAS. WE SEE
NO REASON TO QUESTION DAVEY'S QUALIFICATIONS AS A LABOR SURPLUS AREA
CONCERN.
YOUR SECOND OBJECTION CONCERNS WHETHER A PROPER SIZE STANDARD HAS
BEEN SET IN A PARTICULAR INDUSTRY. THIS IS NOT A MATTER WITHIN THE
JURISDICTION OF THIS OFFICE. THE DETERMINATION OF SIZE STANDARDS FOR
SMALL BUSINESS IS SPECIFICALLY VESTED IN THE SMALL BUSINESS
ADMINISTRATION (15 U.S.C. 632, 637 (B) (6) (, AND WE DO NOT UNDERTAKE TO
DECIDE WHETHER A SIZE STANDARD FIXED BY THE SMALL BUSINESS
ADMINISTRATION IS ERRONEOUS. 41 COMP. GEN. 649, 653.
B-157202, NOV. 2, 1965
TO SOVEREIGN CONSTRUCTION CO., LTD. :
REFERENCE IS MADE TO YOUR LETTER OF JULY 8, 1965, AND SUBSEQUENT
CORRESPONDENCE CONCERNING YOUR ALLEGATION OF ERROR IN YOUR BID AND YOUR
PROTEST OF AWARD TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO.
ENG-18-020-65-77, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, BALTIMORE,
MARYLAND.
UNDER THE IFB BIDS WERE REQUESTED FOR CONSTRUCTION OF ENVIRONMENTAL
HYGIENE AGENCY BUILDING AND ANIMAL CARE FACILITY AT EDGEWOOD ARSENAL,
MARYLAND. THE WORK TO BE PERFORMED WAS DESCRIBED IN THE BASE BID,
CONSISTING OF ITEMS 1 AND 2, AND NINE ADDITIVE ITEMS, NUMBERED A1
THROUGH A9. ADDITIVE A2 COVERED ADDITIONAL COST FOR PROVIDING ONE
INHALATION CHAMBER COMPLETE WITH CONSOLE, ELECTROSTATIC PRECIPITATOR,
AIR-CONDITIONER (ON ROOF) AND AIR COMPRESSOR (IN MECHANICAL ROOM).
ADDITIVE A3 COVERED ADDITIONAL COST FOR INHALATION CHAMBER, SECOND
CONSOLE AND SECOND ELECTROSTATIC PRECIPITATOR. THE INVITATION PROVIDED
THAT ANNOUNCEMENT WOULD BE MADE AT THE BID OPENING, AND PRIOR TO THE
OPENING OF ANY BID, OF THE NET AMOUNT OF MONEY AVAILABLE FOR AWARD, AND
THAT THE BIDS, IF WITHIN LEGAL COST LIMITATION, WOULD BE EVALUATED ON
THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND ALL ADDITIVES
IN THE STATED ORDER OF PRIORITY WHICH WERE WITHIN THE ANNOUNCED
AVAILABLE FUNDS. THE AMOUNT ANNOUNCED AT THE OPENING AS AVAILABLE FOR
AWARD WAS $2,768.083.
BIDS WERE OPENED JUNE 22, 1965, AND THE LOW TOTAL BID FOR THE BASE
BID AND ALL ADDITIVES WAS RECEIVED FROM WEXLER CONSTRUCTION COMPANY IN
THE AMOUNT OF $2,762,800. YOUR BID WAS SECOND LOW IN THE AMOUNT OF
$2,770,100. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE WORK WAS
$2,901,202.
ON THE DAY OF BID OPENING, AND FOLLOWING SUCH OPENING, MR. R. J.
FRANKEL, PRESIDENT OF YOUR COMPANY, TELEPHONED THE OFFICE OF THE
BALTIMORE ENGINEER DISTRICT, ALLEGING A MISTAKE IN THE PRICE OF ADDITIVE
A3. HE WAS REQUESTED TO PRESENT THE NECESSARY EVIDENCE IN SUPPORT OF
THE ALLEGED MISTAKE. ON JUNE 23 EVIDENCE WHICH INCLUDED WORKSHEETS WAS
SUBMITTED INDICATING THAT A PROSPECTIVE SUBCONTRACTOR, WASHINGTON
TECHNOLOGICAL ASSOCIATES, HAD QUOTED A PRICE OF $100,000 FOR ADDITIVE A2
AND $125,000 FOR ADDITIVE A3, WHICH PRICES HAD BEEN INSERTED IN YOUR BID
WITHOUT REALIZING THAT THE QUOTATION FOR A3 INCLUDED THE WORK UNDER A2,
AND THAT THE PRICE FOR A3 SHOULD THEREFORE HAVE BEEN $25,000. AFTER
CONSIDERING ALL THE FACTS AND CIRCUMSTANCES, THE CHIEF OF ENGINEERS
DENIED YOUR REQUEST TO CORRECT THE BID AND AWARD WAS SUBSEQUENTLY MADE
TO WEXLER CONSTRUCTION COMPANY.
IN PROTESTING THIS ACTION YOU HAVE POINTED OUT THE SUBSTANTIAL SAVING
WHICH WILL ACCRUE TO THE GOVERNMENT IF YOUR ARE PERMITTED TO CORRECT
YOUR BID. YOU CONTEND FURTHER THAT A COMPARISON OF YOUR BID ON ITEM A3
WITH OTHER BIDS AND WITH THE GOVERNMENT ESTIMATE SHOWS CLEARLY THAT AN
ERROR HAS BEEN MADE, AND THAT RELIEF SHOULD BE GRANTED UNDER SECTION
2-406.3 (A) (3) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR)
WHICH PROVIDES AS FOLLOWS:
"/A) THE DEPARTMENTS ARE AUTHORIZED TO MAKE THE FOLLOWING
ADMINISTRATIVE DETERMINATIONS IN CONNECTION WITH MISTAKES IN BIDS, OTHER
THAN APPARENT CLERICAL MISTAKES, ALLEGED AFTER OPENING OF BIDS AND PRIOR
TO AWARD.
"/3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS
BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF
A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE
BIDDER TO CORRECT THE MISTAKE MAY BE MADE; PROVIDED THAT, IN THE EVENT
SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS, THE
DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND
THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE
INVITATION AND THE BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING
ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION
PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE.'
YOU ALSO REFER TO OUR DECISION NO. B-148081, MARCH 5, 1965, (CORRECT
YEAR 1962), WHICH, YOU STATE, POINTS OUT UNDER SUBSTANTIALLY SIMILAR
CIRCUMSTANCES THAT THE GOVERNMENT HAS THE DISCRETION TO ACCEPT ANY ITEM
OR COMBINATION OF ITEMS AND COULD, UNDER THE PRESENT CONDITIONS, ACCEPT
YOUR BASE BID, PLUS ADDITIVE ITEMS A1 AND A2, OMITTING THE INCORRECT BID
ITEM A3.
IT IS TRUE THAT IN CERTAIN CASES WHERE A MISTAKE HAS BEEN ALLEGED
PROMPTLY AFTER OPENING BIDS BUT BEFORE AWARD OF THE CONTRACT, AND THERE
HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE THAT A MISTAKE WAS
MADE, ITS NATURE, HOW IT OCCURRED, AND WHAT THE BID PRICES WOULD HAVE
BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE
CORRECTED, BUT ALMOST WITHOUT EXCEPTION THESE CASES HAVE INVOLVED
CORRECTIONS TO PERMIT INCREASES IN LOW BIDS, WHICH DID NOT AFFECT THE
RELATIVE STANDING OF OTHER BIDDERS.
AS SET FORTH IN THE PROVISION OF ASPR QUOTED ABOVE, A STRICTER RULE
MUST APPLY TO CORRECTIONS WHICH WOULD DISPLACE A LOWER RESPONSIVE,
RESPONSIBLE BIDDER. WHERE CORRECTION IS ALLOWED IN A BID WHICH IS ON
ITS FACE THE LOWEST RECEIVED, AND THE CORRECTION DOES NOT MAKE IT HIGHER
THAN THE NEXT LOWEST BID, THE RIGHTS OF OTHER BIDDERS ARE NOT
SUBSTANTIALLY AFFECTED; BUT IN A CASE SUCH AS HERE PRESENTED, WHERE A
DOWNWARD CORRECTION WOULD RESULT IN DISPLACEMENT OF ONE OR MORE OTHER
BIDDERS, THE INTEREST OF THE GOVERNMENT IN PRESERVING AND MAINTAINING
THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT THE RIGHTS OF OTHER BIDDERS
BE CONSIDERED AS CALLING FOR DENIAL OF THE CORRECTION, EXCEPT WHERE THE
EXISTENCE OF THE MISTAKE AND THE AMOUNT OF THE INTENDED BID CAN BE
ASCERTAINED SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. 37
COMP. GEN. 210.
WHILE WE AGREE THAT A COMPARISON OF YOUR QUOTATION ON ADDITIVE A3
WITH THE GOVERNMENT'S ESTIMATE AND WITH OTHER BIDDERS' PRICES INDICATES
THAT A MISTAKE WAS MADE, WE MUST ALSO AGREE WITH THE POSITION OF THE
CONTRACTING AGENCY THAT THE AMOUNT OF YOUR INTENDED BID ON THIS ITEM
CANNOT BE ASCERTAINED WITHOUT REFERRING TO YOUR WORKSHEETS, WHICH ARE
NOT A PART OF THE BID. IT SHOULD BE NOTED, PARENTHETICALLY, THAT YOUR
BID ON ADDITIVE A3 WAS ACTUALLY YOUR INTENDED BID, THE ONLY ERROR BEING
YOUR FAILURE TO NOTE THAT THE SUBBID ON ADDITIVE A3 INCLUDED ADDITIVE
A2. IT ALSO APPEARS FROM DOCUMENTS WHICH WERE NOT A PART OF YOUR BID
THAT THE ORIGINAL QUOTATIONS FROM WASHINGTON TECHNOLOGICAL ASSOCIATES ON
ADDITIVE ITEMS A2 AND A3 WERE $100,000 AND $125,000 AND THAT THESE WERE
LATER INCREASED TO $111,149 AND $135,937, RESPECTIVELY. SINCE YOU FELT
THAT THE INITIAL QUOTATIONS REPRESENTED THE FAIR COST OF THE WORK AND
THAT A SUBCONTRACT COULD BE ENTERED INTO ON THE BASIS OF SUCH FIGURES,
THEY WERE ENTERED ON YOUR BID SUMMARY SHEETS, AND THE SUMS OF $600 AND
$700, WHICH YOU ORIGINALLY ADDED TO COVER BOND PREMIUMS, WERE DROPPED
FROM YOUR FINAL BID FOR COMPETITIVE PURPOSES. IN THIS CONNECTION, THE
GOVERNMENT ESTIMATE OF $25,885 ON ADDITIVE A3 COMPARES TO THE ACTUAL BID
PRICES RANGING FROM $15,000 TO 28,000. THE GOVERNMENT ESTIMATE OF
$103,540 ON ADDITIVE A2 COMPARES TO THE RESPECTIVE BIDS OF WEXLER AND
SECURITY CONSTRUCTION CO., THE SECOND AND THIRD LOW BIDDERS IN THE
AMOUNTS OF $116,700 AND $115,000. FROM THE FOREGOING, IT IS APPARENT
THAT THERE ARE SUBSTANTIAL VARIATIONS IN THE ABOVE FIGURES AND THAT A
COMPARISON OF SAME DOES NOT DISCLOSE WHAT YOUR BID ON ADDITIVE A3 SHOULD
HAVE BEEN. NOR IS THERE ANY OTHER WAY TO ASCERTAIN FROM THE BID ALONE
WHAT HAS BEEN INCLUDED TO ENLARGE THE PRICE OF THIS ITEM. ONLY
REFERRING TO YOUR WORKSHEETS, CAN IT BE DETERMINED THAT YOUR PRICE FOR
ADDITIVE A3 INCLUDED THE WORK UNDER ADDITIVE A2.
CONCERNING YOUR CONTENTION THAT ITEM A3 SHOULD HAVE BEEN DISREGARDED
IN CONSIDERING YOUR BID FOR AWARD, IN THE CASE CONSIDERED IN OUR
DECISION B-148081, MARCH 5, 1962, TO WHICH YOU REFER, THE GOVERNMENT WAS
PERMITTED BY THE TERMS OF THE INVITATION TO ACCEPT ANY ITEM OR
COMBINATION OF ITEMS THAT IT MIGHT CHOOSE. HOWEVER, IN THE PRESENT
CASE, AS STATED HEREIN, THE INVITATION PROVIDED THAT BIDS WOULD BE
EVALUATED ON THE BASIS OF THE AGGREGATE COST OF THE BASE SCHEDULE AND
ALL ADDITIVES WHICH WERE WITHIN THE ANNOUNCED AVAILABLE FUNDS. SINCE
THE LOW BID, INCLUDING ALL ADDITIVES, WAS WITHIN THE AVAILABLE FUNDS, IT
IS OUR OPINION THAT AWARD WAS REQUIRED TO BE MADE ON THE BASIS OF THE
TOTAL AGGREGATE COST, AND THERE WAS NO DISCRETION IN THE CONTRACTING
OFFICER TO OMIT ADDITIVE ITEM A3.
ACCORDINGLY, WE SEE NO BASIS ON WHICH WE WOULD BE JUSTIFIED IN
QUESTIONING THE ACTION OF THE DEPARTMENT OF THE ARMY IN DENYING YOUR
REQUEST FOR CORRECTION OF YOUR BID, AND YOUR PROTEST AGAINST THE
CONTRACT AWARDED TO WEXLER CONSTRUCTION COMPANY MUST THEREFORE BE
DENIED.
B-157349, NOV. 2, 1965
TO COLONEL PAUL J. LEAHY, JAGC, CHIEF, U.S. ARMY CLAIMS SERVICE,
OFFICE OF THE JUDGE ADVOCATE GENERAL:
WE REFER TO YOUR LETTER OF JULY 22, 1965, JAGD, FORWARDING FOR OUR
CONSIDERATION, UNDER THE MERITORIOUS CLAIMS PROVISIONS OF 31 U.S. CODE
236, THE CLAIM OF MR. SANG UI LEE OF KOREA FOR ROCK REMOVED FROM HIS
QUARRY BY UNITED STATES FORCES IN KOREA DURING THE PERIOD JANUARY 26,
1957, TO SEPTEMBER 25, 1964.
THE PRESENT RECORD DISCLOSES THE PROPERTY OF MR. LEE WAS MADE
AVAILABLE TO THE UNITED STATES AND UNITED NATIONS FORCES IN KOREA BY THE
GOVERNMENT OF THE REPUBLIC OF KOREA FOR USE AS A ROCK QUARRY. IT WAS
UNDERSTOOD THAT "ALL NEGOTIATIONS WITH THE OWNER AND/OR TENANT OF THE
PROPERTY THUS ACQUIRED FOR THE US/UN FORCES SHALL BE BETWEEN THE
REPUBLIC OF KOREA AND THE OWNER AND/OR TENANT OF THE PROPERTY.' AND
FURTHER UNDERSTOOD "THAT ALL CLAIMS FOR RENT OR DAMAGES ARISING OUT OF
THE OCCUPANCY AND/OR USE OF THE PROPERTY BY US/UN FORCES SHALL BE
SETTLED WITH THE CLAIMANTS BY THE GOVERNMENT OF THE REPUBLIC OF KOREA.'
THE INTER-GOVERNMENTAL AGREEMENT UNDER WHICH THE PROPERTY WAS MADE
AVAILABLE TO THE UNITED STATES AND UNITED NATIONS FORCES DOES NOT IMPOSE
AN OBLIGATION ON THE UNITED STATES TO THE OWNER. NOR DOES IT APPEAR
UNREASONABLE, IN THE CONTEXT OF THE INTERNATIONAL SITUATION AND RELATED
INTERNATIONAL AGREEMENTS, TO VIEW THE FURNISHING OF THE PROPERTY
INVOLVED AS A CONTRIBUTION OF THE GOVERNMENT OF THE REPUBLIC OF KOREA TO
THE JOINT EFFORT UNDER THE UNITED NATIONS OF MAINTAINING THE DEFENSE OF
THE REPUBLIC OF KOREA. UNDER THE CIRCUMSTANCES WE FAIL TO SEE THAT THE
PRESENT CLAIM, WITH RESPECT TO THE UNITED STATES, HAS "SUCH ELEMENTS OF
LEGAL LIABILITY OR EQUITY" AS TO WARRANT REFERRAL TO THE CONGRESS
PURSUANT TO 31 U.S.C. 236.
CONSEQUENTLY, WE MUST DECLINE TO TAKE SUCH ACTION WITH RESPECT TO THE
CLAIM OF MR. LEE.
B-157446, NOV. 2, 1965
TO LEAR SIEGLER, INC. :
REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 11, 1965, IN WHICH YOU
PROTEST A PROPOSED AWARD OF A CONTRACT TO GUIDANCE TECHNOLOGY, INC.
(GTI), FOR REMOTE ATTITUDE INDICATING SYSTEMS UNDER INVITATION FOR BIDS
NO. 600-849-65, ISSUED BY THE NAVY PURCHASING OFFICE (NPO), WASHINGTON
NAVY YARD, ON THE GROUNDS THAT GTI DOES NOT MEET DEPARTMENT OF DEFENSE
STANDARDS OF RESPONSIBILITY AS SET FORTH IN ASPR 1-903.1. WE HAVE ALSO
RECEIVED A COPY OF YOUR LETTER OF SEPTEMBER 28, 1965, TO THE CONTRACTING
OFFICER RESPONSIBLE FOR THIS PROCUREMENT, IN WHICH IT IS ALLEGED THAT A
CERTIFICATE OF COMPETENCY (COC), WHICH WAS ISSUED BY THE SMALL BUSINESS
ADMINISTRATION (SBA) IN SEPTEMBER 1965, IS NULL AND VOID BECAUSE IT WAS
ISSUED AFTER THE SBA'S AUTHORITY AND JURISDICTION ON THIS PROCUREMENT
HAD EXPIRED.
THE ADMINISTRATIVE RECORD STATES THAT THE CONTRACTING OFFICER
DETERMINED IN ACCORDANCE WITH SECTION I, PART 9 OF ASPR, THAT GTI LACKED
FINANCIAL RESPONSIBILITY, AND THAT REJECTION OF ITS LOW BID WAS
THEREFORE JUSTIFIED. SINCE GTI IS A SMALL BUSINESS CONCERN THE MATTER
OF ITS RESPONSIBILITY WAS REFERRED TO THE SBA FOR A DETERMINATION AS TO
WHETHER IT SHOULD ISSUE A COC. THE PROCURING ACTIVITY GRANTED THE SBA A
5 DAY EXTENSION OF THE NORMAL 15 DAY COC APPLICATION PROCESSING TIME
AFFORDED BY ASPR 1-705.4, WHICH EXTENSION WAS TO HAVE EXPIRED ON
SEPTEMBER 20, 1965. THE RECORD DOES NOT INDICATE WHETHER NPO EXPLICITLY
GRANTED ANY EXTENSION BEYOND SEPTEMBER 20.
ON SEPTEMBER 16, THE SBA FORWARDED INFORMATION TO THE NAVY DEPARTMENT
BY WRITTEN MEMORANDUM "IN ACCORDANCE WITH THE AGREEMENT WITH DOD.' THE
SBA INFORMED THE DEPARTMENT THAT GTI "IS IN CHAPTER 11 WITH APPOINTED
RECEIVER" WHO "HAS DONE MUCH TO ASSIST THE FIRM IN ITS FINANCIAL
INDEBTEDNESS. SOURCES OF FUNDS ARE AS FOLLOWS: WORKING CAPITAL,
PROGRESS PAYMENTS, AND SBA LOAN IS POSSIBLE UPON APPROVAL OF
PREPRODUCTION EQUIPMENT.
"CAPACITY: THERE ARE NO PRODUCTION PROBLEM IN CONNECTION WITH COC
APPLICANT.
"IN EVENT THE REQUEST FOR COC IS WITHDRAWN OR AWARD IS MADE WITHOUT
BENEFIT OF COC, PLEASE CONFIRM THE REASONS FOR SUCH ACTION BEING TAKEN.'
IT APPEARS THAT THE ABOVE INFORMATION MAY HAVE BEEN SUBMITTED TO
ACCORD WITH ACTIONS CONTEMPLATED BY ASPR 1-705.4, WHICH IN SUBPARAGRAPHS
D AND E PROVIDES THAT IT IS THE POLICY OF DOD TO ENDEAVOR TO REACH
AGREEMENT WITH THE SBA REGARDING THE LACK OF CAPACITY OR CREDIT OF A
SMALL BUSINESS CONCERN; THAT EVERY EFFORT SHOULD BE MADE TO RESOLVE ANY
DIFFERENCES BETWEEN THE SBA AND THE MILITARY DEPARTMENT THROUGH A
COMPLETE EXCHANGE OF PRE-AWARD SURVEY INFORMATION; AND THAT IF ANY NEW
OR ADDITIONAL FACTS WARRANT, THE NEGATIVE DETERMINATION AS TO CAPACITY
OR CREDIT SHOULD BE REVERSED. IN ADDITION, SUBPARAGRAPH F PROVIDES THAT
THE CONTRACTING OFFICER MAY APPEAL A COC THROUGH HIS DEPARTMENT IF HE
HAS SUBSTANTIAL DOUBT AS TO THE ABILITY OF THE CONTRACTOR TO PERFORM.
APPARENTLY THE NAVY DEPARTMENT AND SBA WERE UNABLE TO RESOLVE THEIR
DIFFERENCES REGARDING THE ABILITY OF GTI TO PERFORM THE SUBJECT
CONTRACT, SINCE THE NEGATIVE ADMINISTRATIVE DETERMINATION AS TO CREDIT
DOES NOT APPEAR TO HAVE BEEN REVERSED. ON SEPTEMBER 23, 1965, PURSUANT
TO SECTION 8 (B) (7) OF PUBLIC LAW 85-536, 72 STAT. 384, 15 U.S.C. 637,
THE SBA CERTIFIED THAT GTI WAS COMPETENT, AS TO CAPACITY AND CREDIT, TO
PERFORM THE PROPOSED PROCUREMENT COVERED BY THE SUBJECT IFB.
SUBSEQUENTLY, THE NAVY DEPARTMENT DETERMINED THAT IT WOULD NOT APPEAL
THE COC, SINCE THE PROPOSED CONTRACT DID NOT APPEAR TO REPRESENT A LOSS
CONTRACT AND SINCE NO INFORMATION OTHER THAN THAT ALREADY FURNISHED TO
SBA WAS AVAILABLE.
THE 15 DAY PERIOD ALLOTTED FOR PROCESSING A COC APPLICATION IS FOR
THE BENEFIT OF THE PROCUREMENT OFFICE WHICH, AFTER EXPIRATION OF SUCH
PERIOD, MAY EITHER PROCEED INDEPENDENTLY OF SBA ADVICE OR AWAIT SUCH
ADVICE AS IT DEEMS APPROPRIATE. B-156619, DATED JUNE 9, 1965. IN THE
INSTANT CASE, IT APPEARS THE THE PROCUREMENT OFFICE CHOSE TO FORMALLY
EXTEND THE TIME ALLOWED SBA UNTIL SEPTEMBER 20, AND THEN TO WAIT AN
ADDITIONAL 3 DAYS UNTIL SEPTEMBER 23 TO RECEIVE SBA'S ADVICE. IN THESE
CIRCUMSTANCES, WE FIND NO REASON TO DISAGREE WITH THE NAVY DEPARTMENT'S
ACCEPTANCE OF THE SEPTEMBER 23 COC AS ESTABLISHING GTI'S THEN PRESENT
CREDIT AND CAPACITY. 38 COMP. GEN. 289; B-156288, JULY 29, 1965.
IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE PRESENT RECORD
AFFORDS NO LEGAL BASIS FOR OBJECTING TO THE CONTRACT WHICH NPO PROPOSES
TO AWARD TO GTI. ACCORDINGLY, YOUR PROTEST IS DENIED.
B-157489, NOV. 2, 1965
TO SERVODYNAMIC DIVISION:
FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 16, 1965,
PROTESTING AGAINST THE AWARD OF A CONTRACT TO ELECTRO INTERNATIONAL,
INC., BY THE UNITED STATES NAVAL SUPPLY CENTER, MARE ISLAND NAVAL
SHIPYARD, OAKLAND, CALIFORNIA, PURSUANT TO DEPARTMENT OF THE NAVY
REQUEST FOR PROPOSALS NO. 228-73607-65.
THE CITED REQUEST CALLED FOR PROPOSALS FOR THE DESIGN, FABRICATION,
DELIVERY, INSTALLATION AND CHECKOUT OF A BROADBAND FIELD INTENSITY
RADIATION SYSTEM. PROPOSALS WERE RECEIVED FROM THE FOLLOWING THREE
FIRMS:
CHART
ELECTRO INTERNATIONAL, INC. SYSTEM 1 $75,608.81
SYSTEM 2 72,986.08
SERVO CORPORATION OF AMERICA 83,100.00*
MCDONNELL AIRCRAFT 111,014.00
ALTERNATE 85,560.00
*/LATER REDUCED TO $77,400 BY VOLUNTARY REDUCTION)
THE RECORD SHOWS THAT THE PROPOSALS WERE SUBMITTED TO THE REQUIRING
ACTIVITY FOR TECHNICAL REVIEW AND RECOMMENDATION. IT IS REPORTED THAT A
REVIEW OF THE PROPOSALS RESULTED IN A DETERMINATION THAT NONE OF THE
PROPOSALS MET THE SPECIFICATION REQUIREMENTS IN THEIR ENTIRETY. BOTH
THE PROPOSALS OF YOUR FIRM AND THAT OF ELECTRO INTERNATIONAL, INC.,
REQUIRED ORAL CLARIFICATIONS AND DISCUSSIONS. IT WAS DETERMINED THAT
THE PROPOSAL OF YOUR FIRM DID NOT MEET SPECIFICATION REQUIREMENTS IN AT
LEAST TWO AREAS CONSIDERED OF MAJOR CONSEQUENCE, AS THE REQUIRED CHANGES
WOULD ENTAIL SIGNIFICANT MATERIAL AND EXPENSE. IN REGARD TO THE AREAS
IN WHICH YOU FAILED TO MEET THE SPECIFICATION REQUIREMENTS, THE
DEPARTMENT OF THE NAVY REPORTS AS FOLLOWS:
"A. THE SPECIFIED MINIMUM PULSE WIDTH IS O.1 MICROSECONDS. THE
SERVO CORPORATION OF AMERICA PROPOSAL SPECIFIED PULSE RISE AND FALL
TIMES OF 0.15 MICROSECONDS. THESE RISE AND FALL TIMES WOULD PRECLUDE
OBTAINING A PULSE WIDTH OF 0.1 MICROSECONDS.
"B. THE REQUIRED ANTENNA INSTALLATION IS SUCH THAT AN ANTENNA
ELEVATION OF APPROXIMATELY 30 FEET IS REQUIRED. THE SERVO CORPORATION
OF AMERICA LETTER ACCOMPANYING THEIR PROPOSAL (SCA P-3043, JULY 13,
1965) STATES THAT THEIR "PROPOSAL ASSUMES AN ANTENNA ELEVATION OF NOT
MORE THAN 10 FEET LOCATED AT A MAXIMUM OF 25 FEET FROM THE INSTRUMENT
CONSOLE.' THIS PROPOSED ANTENNA INSTALLATION CONDITION IS NOT PHYSICALLY
POSSIBLE AT THE EXISTING INSTALLATION SITE. THE INSTALLATION SITE WAS
VISITED BY A SERVO CORPORATION OF AMERICA REPRESENTATIVE PRIOR TO
SUBMISSION OF THEIR PROPOSAL, AT WHICH TIME CONSOLE AND ANTENNA
LOCATIONS WERE DISCUSSED.'
AS A RESULT OF THE TECHNICAL REVIEW, IT WAS DETERMINED THAT THE
PROPOSAL OF ELECTRO INTERNATIONAL, INC., MET ALL SPECIFICATION
REQUIREMENTS WITH THE EXCEPTION OF ANTENNA BEAM WIDTH WHICH WAS
CONSIDERED TO BE A MINOR DISCREPANCY. AWARD WAS RECOMMENDED TO ELECTRO
INTERNATIONAL, INC., FOR SYSTEM NO. 1 WITH THE FOLLOWING MODIFICATIONS:
"A. REPLACEMENT OF THE EIGHT (8) PROPOSED HORN ANTENNAS WITH EIGHT
(8) MODIFIED HORNS THAT HAVE THREE (3) DECIBEL BEAM WIDTHS OF
APPROXIMATELY 40 DEGREES.
"B. REPLACEMENT OF THE HEWLETT-PACKARD 691A, 692A, 693A AND 694A
UNITS WITH 691B, 692B, 693B AND 694B UNITS.'
IT IS REPORTED THAT THE ALTERATION TO REPLACE THE EIGHT HORN ANTENNAS
WAS REQUIRED TO MEET THE PERFORMANCE SPECIFICATIONS OF THE REQUEST FOR
PROPOSALS AND THAT THE ALTERATION TO REPLACE THE HEWLETT-PACKARD UNITS
MODEL A'S WITH MODEL B'S WAS TO IMPROVE THE QUALITY OF THE SYSTEM
OFFERED. BY LETTER DATED AUGUST 2, 1965, ELECTRO INTERNATIONAL, INC.,
QUOTED INCREASES IN PRICES OF $1,243 AND $1.740, RESPECTIVELY, FOR THE
TWO CHANGES, MAKING A REVISED TOTAL QUOTATION OF $78,592.01 FOR SYSTEM
NO. 1. ON THE BASIS OF THE REVISED PROPOSAL, A CONTRACT IN THAT AMOUNT
WAS AWARDED TO ELECTRO INTERNATIONAL, INC., ON AUGUST 12, 1965. IT IS
REPORTED THAT THE ADDITIONAL REQUIREMENT COVERING THE CHANGE IN THE
HEWLETT-PACKARD EQUIPMENT WAS IN AN AREA IN WHICH THE PROPOSAL ALREADY
MET SPECIFICATIONS AND THAT IT COULD HAVE BEEN NEGOTIATED UNDER THE
CHANGES CLAUSE AFTER CONTRACT AWARD, BUT THAT IT WAS INCLUDED IN THE
AWARD FOR PROCEDURAL SIMPLICITY.
YOU REQUEST ADVICE AS TO WHY YOUR FIRM WAS NOT THE SUCCESSFUL BIDDER
IN VIEW OF THE FACT THAT YOUR PRICE WAS $1,000 LOWER THAN THE PRICE
QUOTED BY THE SUCCESSFUL BIDDER AND THE ADDITIONAL FACT THAT YOUR
PROPOSAL WAS JUDGED TECHNICALLY ACCEPTABLE.
AS POINTED OUT ABOVE YOUR PROPOSAL WAS DETERMINED TO BE TECHNICALLY
UNACCEPTABLE BECAUSE IT DID NOT MEET SPECIFICATION REQUIREMENTS IN AT
LEAST TWO AREAS OF MAJOR CONSEQUENCE. WHILE THE RECORD DOES INDICATE
THAT ELECTRO INTERNATIONAL, INC., WAS PERMITTED TO CHANGE ITS PROPOSAL
SO AS TO MEET THE SPECIFICATION REQUIREMENT AS TO THE ANTENNA BEAM
WIDTH, SUCH CHANGE WAS CONSIDERED BY THE CONTRACTING OFFICER TO BE OF A
MINOR NATURE. IN REGARD TO YOUR PROPOSAL, THE DEPARTMENT OF THE AIR
FORCE STATES THAT NEGOTIATIONS WERE NOT CONDUCTED WITH YOUR FIRM BECAUSE
OF THE CONTRACTING OFFICER'S DETERMINATION THAT TIME DID NOT PERMIT IT
AND, ALSO, FOR THE REASON THAT YOUR FIRM'S PROPOSAL CONTAINED SUCH MAJOR
DEVIATIONS FROM THE SPECIFICATIONS THAT NECESSARY REVISION WOULD HAVE
CAUSED PRICE INCREASES FAR BEYOND THE RANGE OF YOUR ORIGINAL PROPOSAL.
IN REGARD TO YOUR STATEMENT THAT YOUR PRICE WAS $1,000 LOWER THAN THE
PRICE OF THE SUCCESSFUL BIDDER, YOU MAY BE ADVISED THAT WHILE THE AMOUNT
OF THE CONTRACT AWARD, $78,592.01, WAS APPROXIMATELY $1,000 HIGHER THAN
THE AMOUNT OF YOUR PROPOSAL, IT SHOULD BE NOTED THAT $1,740 OF THE
CONTRACT PRICE WAS TO COVER THE CHANGE IN THE HEWLETT-PACKARD EQUIPMENT
WHICH, IT IS REPORTED, IS IN EXCESS OF THE REQUIREMENTS OF THE ORIGINAL
SPECIFICATIONS AND WHICH, ORDINARILY, WOULD HAVE BEEN HANDLED BY A
CHANGE ORDER.
WHILE UNDER NORMAL CIRCUMSTANCES THE ADMINISTRATIVE OFFICE SHOULD
HAVE NEGOTIATED FURTHER WITH YOU, INASMUCH AS IT WAS DETERMINED THAT THE
PROCUREMENT WAS URGENT AND THAT YOUR PROPOSAL NECESSARILY WOULD HAVE
BEEN CONSIDERABLY HIGHER IF YOU COMPLIED WITH THE SPECIFICATIONS WE
CANNOT CONCLUDE THAT THE ADMINISTRATIVE ACTION WAS IMPROPER. YOUR
PROTEST, THEREFORE, IS DENIED.