B-149634, SEP. 6, 1962

B-149634, SEP. 6, 1962

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

THIS REFERS TO YOUR LETTER OF AUGUST 6, 1962, WITH ENCLOSURES, RELATIVE TO A PROTEST BY KAMIN FURNITURE COMPANY, BELLAIRE, TEXAS, AGAINST THE REJECTION OF ITS BIDS UNDER TWO INVITATIONS FOR SUPPLYING FURNITURE FOR USE IN FOUR BUILDINGS NOW UNDER CONSTRUCTION AT THE BROOKS AIR FORCE BASE, TEXAS.

THE FACTS ARE REPORTED AS FOLLOWS:

IN MAY 1961 BROOKS AIR FORCE BASE REQUESTED THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, REGION 7, FORT WORTH, TEXAS, TO ASSIST IN THE PLANNING WORK FOR SUPPLYING SPECIALIZED FURNITURE AND FURNISHINGS FOR A GROUP OF FOUR SCIENTIFIC BUILDINGS WHICH ARE TO BE CONSTRUCTED FOR THE DEPARTMENT OF THE AIR FORCE AND ARE TO BECOME A PART OF THE SCHOOL OF AEROSPACE MEDICINE, SAN ANTONIO, TEXAS. AN INITIAL REQUISITION WAS PREPARED BY BROOKS AIR FORCE BASE, AND THIS REQUISITION WAS RECEIVED BY GSA ON MAY 15, 1962, COVERING SPECIALIZED FURNITURE AND FURNISHINGS FOR THE BUILDINGS. IT WAS EXPECTED THAT ADDITIONAL REQUISITIONS WOULD BE RECEIVED FOR INCLUSION IN THE INVITATION WHEN ISSUED. HOWEVER, ON MAY 25, IT WAS DETERMINED TO RELEASE THE INVITATION PRIOR TO RECEIPT OF THE ADDITIONAL REQUISITIONS, IN ORDER TO AFFORD A MAXIMUM BIDDING TIME. THE ADDITIONAL REQUISITIONS WERE RECEIVED BY GSA ON MAY 25, BUT AFTER THE INITIAL INVITATION (INVITATION NO. DA-P7-36777) HAD BEEN RELEASED FOR PRINTING. AS A RESULT, THE ADDITIONAL REQUISITION BECAME THE SUBJECT OF SEPARATE INVITATION NO. DA-P7-36859. THIS INVITATION WAS RELEASED TO THE PRINTER LATER THE SAME DAY. BOTH INVITATIONS WERE ISSUED ON MAY 25, 1962, AND WERE SCHEDULED FOR OPENING AT 1:00 P.M., JUNE 14, 1962.

"BRAND NAME OR EQUAL" ITEMS WERE SPECIFIED IN BOTH INVITATIONS, AND IN THIS REGARD, ARTICLE 7 OF SUPPLY CONTRACT SPECIAL CLAUSE OF THE INVITATION, INCORPORATED INTO INVITATIONS, PROVIDES THAT:

"/C) (I) 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.

"/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.'

THE "DELIVERY AND INSTALLATION" CLAUSE, FOR BOTH INVITATIONS ARE THE SAME, AND IT PROVIDES AS FOLLOWS:

"DELIVERY AND INSTALLATION: THE CONTRACTOR WILL DELIVER, ASSEMBLE, AND INSTALL ALL ITEMS INCLUDED IN THIS CONTRACT AS INDICATED. STORAGE OF THE ITEMS OF EQUIPMENT PRIOR TO THEIR INSTALLATION IS THE RESPONSIBILITY OF THE CONTRACTOR. DELIVERY OF THE ITEMS LISTED HEREIN WILL BE AS FOLLOWS: PRIOR TO THE DATE THE ITEMS ARE REQUIRED FOR ANY ONE BUILDING, THE CONTRACTOR WILL BE NOTIFIED BY THE SCHOOL OF AEROSPACE MEDICINE TO AFFECT DELIVERY. DUE TO THE VARIOUS VISCISSITUDES OF ANY CONSTRUCTION PROGRAM, ONLY APPROXIMATE DATES CAN BE GIVEN AT THIS TIME. THE SCHEDULE LISTED BELOW GIVES THE TIME PERIODS IN WHICH THE VARIOUS BUILDINGS UNDER THIS CONTRACT WILL BE COMPLETED.

TABLE

A. PROFESSIONAL BLDG. - 1 FEB - 30 MAR 63

B. BIONUCLEONICS BLDG. 30 APR - 1 JUNE 63

C. BIOASTRONAUTICS BLDG. 1 APR - 30 JUNE 63

D. LIBRARY BLDG. 15 FEB - 30 MAR 63

"DELIVERY DATES FOR THE FURNISHINGS FOR THESE BUILDINGS WILL BE GIVEN THE CONTRACTOR AND WILL FALL WITHIN THE TIME PERIODS SPECIFIED ABOVE FOR EACH BUILDING. A REASONABLE TIME WILL BE ALLOWED THE CONTRACTOR TO EFFECT DELIVERY AND INSTALLATION NOT TO EXCEED THREE (3) WEEKS AFTER NOTIFICATION BY THE SCHOOL OF AEROSPACE MEDICINE. PARTIAL ORDERS WILL NOT BE ACCEPTABLE.'

PRIOR TO THE BID OPENING, PROSPECTIVE BIDDERS WERE INSTRUCTED (BY AMENDMENT TO THE INVITATIONS) TO ATTEND A MEETING AT BROOKS AIR FORCE BASE, ON MAY 31, 1:00 P.M., RELATIVE TO BOTH INVITATIONS.

BIDS WERE OPENED AS SCHEDULES, ON JUNE 14TH, AND THE FOLLOWING THREE BIDS WERE RECEIVED AND TABULATED:

INVITATION INVITATION

DA-P7-36777 DA-P7-36859

H. DORSEY DOUGLAS, INC. $59,686.40 $57,187.09

(LESS 2 PERCENT (LESS 2 PERCENT

30 DAYS) 30 DAYS)

TITCHE'S COMMERCIAL $49,292.87 $49,261.16

SALES DIVISION (NET) (NET)

KAMIN FURNITURE COMPANY $49,655.76 $46,193.52

(NET) (NET)

IT IS REPORTED THAT THE THREE BIDDERS ALL ATTENDED THE MAY 31ST MEETING AT BROOKS AIR FORCE BASE.

KAMIN FURNITURE COMPANY ENCLOSED A LETTER OF JUNE 13, 1962, WITH ITS BIDS, WHICH STATES AS FOLLOWS:

"ENCLOSED YOU WILL FIND OUR BIDS NUMBER/S 3 DA-P7-36859 AND DA-P7 36777 COVERING THE FURNISHINGS FOR AEROEO SPACE SCHOOL OF MEDICINE, BROOKS AFB, TEXAS. THE AGGREGATE AMOUNTS SHOWN WILL APPLY EXCEPT THAT IN THE EVENT YOU ARE UNABLE TO RECEIVE THE MERCHANDISE PRIOR TO THE DATES AS LISTED:

TABLE

PROFESSIONAL BLDG 30 MARCH 1963

BIO-NUCLEONICS DO. 1 JUNE 1963

BIO-ASTRONAUTICS DO. 30 JUNE 1963

LIBRARY DO. 30 MARCH 1963

"IN SUCH AN EVENT THEN IT WILL BE NECESSARY FOR YOU TO ADD 1/2 OF 1 PERCENT PER MONTH OR PART THEREOF TO THE AGGREGATE DOLLAR AMOUNT REPRESENTING MERCHANDISE UNDELIVERED, OR ACCEPT AS COMPLETION OF DELIVERY A CERTIFIED WAREHOUSE RECEIPT COVERING THE UNDELIVERED MERCHANDISE AND SIGNIFYING YOUR ACCEPTANCE OF RESPONSIBILITY FOR PAYMENT OF STORAGE CHARGES INCURRED AFTER THE ABOVE DATES. IN SUCH CASE IT WILL BE OUR CONTINUING RESPONSIBILITY TO PUT IN PLACE THE FURNITURE AFTER THE WAREHOUSE OR DRAY FIRM DESIGNATED AND PAID BY YOU MAKES DELIVERY OF THE MERCHANDISE TO THE BUILDING.

"BASIS FOR PRICES QUOTED ARE ON OUR BEING AWARDED THE ENTIRE CONTRACT FOR BOTH INVITATIONS.'

THE BIDDER ALSO ENCLOSED A STATEMENT THAT IT WOULD FURNISH WESTIN NEILSEN CORPORATION, SHELBYVILLE DESK COMPANY AND STEIM LUMBER COMPANY ITEMS IN LIEU OF BRAND NAME ITEMS, AND THAT:

"GSA RECORDS WILL REFLECT PREVIOUS APPROVAL OF THE ABOVE ALTERNATES BY THEIR QUALITY CONTROL PEOPLE FOR PURCHASE FOR AND USE BY THE U.S. AIR FORCE AT THE U.S. AIR FORCE HOSPITAL AT LACKLAND AIR FORCE BASE, TEXAS.'

NO OTHER INFORMATION RELATIVE TO THE SUBSTITUTE "OR EQUAL" ITEMS WAS FURNISHED BY THE BIDDER.

THE CONTRACTING OFFICE CONCLUDED THAT THE KAMIN BIDS COULD NOT BE CONSIDERED FOR THE AWARDS BECAUSE:

1. THE COMPANY QUALIFIED ITS BIDS BY IMPOSING THE CONDITION THAT ITS BID PRICES WERE DEPENDENT UPON THE RECEIPT OF AWARDS FOR BOTH INVITATIONS.

2. THE COMPANY FURTHER QUALIFIED ITS BIDS BY SETTING FORTH PRICE ADJUSTMENT PROVISIONS ENCOMPASSING FORMULA STORAGE RATES.

3. THE COMPANY ALSO QUALIFIED ITS BIDS BY ESTABLISHING STORAGE ARRANGEMENTS ON AN ALTERNATIVE BASIS PURSUANT TO WHICH THE GOVERNMENT WOULD TAKE OVER WAREHOUSE RECEIPTS UNDER CERTAIN CIRCUMSTANCES.

4. THE COMPANY FAILED TO SUBMIT DESCRIPTIVE LITERATURE TO THE GOVERNMENT AS REQUIRED BY ARTICLE 7 OF SUPPLY CONTRACT SPECIAL CLAUSES OF THE INVITATION.

IT WAS DETERMINED ALSO, THAT TITCHE'S COMMERCIAL SALES DIVISION HAD OFFERED "OR EQUAL" ITEMS WHICH WERE NOT EQUAL TO THE BRAND NAME PRODUCTS. ON JUNE 21, 1962, H. DORSEY DOUGLAS RECEIVED AWARD UNDER BOTH INVITATIONS AT ITS BID PRICES.

ON JULY 3, 1962, KAMIN PROTESTED THE AWARDS, AND AS A RESULT, THE GSA BOARD OF CONTRACT APPEALS WAS REQUESTED TO CONDUCT A HEARING IN ORDER TO ESTABLISH THE FACTS AND TO FURNISH AN ADVISORY OPINION ON THE PROTEST. HEARING WAS HELD ON JULY 18, 1962 (REPORTED AS DOCKET NO. 813). THE KAMIN OFFICIAL WHO PREPARED THE COMPANY'S BIDS (MR. CLIFF BAUGHMAN) WAS PRESENT AT THE HEARING, AS WELL AS VARIOUS OFFICIALS FROM GSA. THE BOARD REPORTED ITS CONCLUSION UNDER DATE OF JULY 31, 1962, AND YOU HAVE ASKED US TO REVIEW THE REPORT AND TO INFORM YOU WHETHER WE CONCUR IN THE REASONABLENESS OF THE RECOMMENDATIONS MADE BY THE BOARD.

THE BOARD RECOMMENDED THAT THE ACTION OF THE CONTRACTING OFFICER IN REJECTING THE KAMIN BIDS BE AFFIRMED.

IT IS STATED IN THE RECORD OF THE BOARD HEARING BY THE GOVERNMENT PROCUREMENT OFFICIALS INVOLVED THAT IT WAS NOT POSSIBLE FOR THEM TO DETERMINE FROM KAMIN'S BIDS THE IDENTITY OF THE "OR EQUAL" PRODUCTS OFFERED IN SUBSTITUTION OF BRAND NAME ITEMS.

A REFERENCE HAD BEEN MADE BY KAMIN TO A PRIOR PROCUREMENT, WHICH WAS INVITATION NO. DA-54387, ISSUED BY GSA, FORT WORTH, TEXAS, ON JUNE 2, 1960, AND AWARDED TO THE SUNILAND FURNITURE COMPANY ON JUNE 29, 1960, COVERING HOSPITAL FURNITURE AND FURNISHINGS FOR LACKLAND AIR FORCE BASE. THE CONTRACTOR'S BID HAD BEEN SUBMITTED UNDER THE SIGNATURE OF MR. CLIFF BAUGHMAN, AND IT HAD OFFERED, AS SUBSTITUTE ITEMS, CERTAIN BRANDS, INCLUDING SHELBYVILLE CUSTOM 23 FOR JASPER SERIES 15 DESK AND BOOKCASE, AND WESTIN-NEILSON NUMBER 700 FOR KNOLL 76S STENO CHAIR. HOWEVER, NO STEIN LUMBER BRANDS WERE INCLUDED AND THERE IS NOT AN EXACT CORRESPONDENCE OF ITEMS ON THE PRIOR INVITATION WITH THE CURRENT INVITATIONS.

UNDER THE CURRENT INVITATIONS, KAMIN MERELY SPECIFIED THAT IT WOULD FURNISH WESTIN-NEILSEN, SHELBYVILLE AND STEIN LUMBER ITEMS IN SUBSTITUTION FOR THE BRAND ITEMS INDICATED. PRICES WERE INSERTED IN THE BID SCHEDULES BUT KAMIN DID NOT INDICATE MODEL NUMBERS FOR THE SUBSTITUTE ITEMS EITHER BY AN INSERTION NEXT TO THE INDIVIDUAL ITEM, AS WAS THE CASE IN THE PRIOR BID SUBMITTED BY SUNILAND FURNITURE COMPANY, OR ANYWHERE ELSE IN ITS BID. KAMIN INDICATED THAT IT WOULD SUPPLY EITHER A SHELBYVILLE OR STEIN LUMBER PRODUCT AS A SUBSTITUTE FOR JASPER, BUT THERE WAS NO REFERENCE AS TO WHICH BRAND SUBSTITUTE IT OFFERED. WE ARE ADVISED BY YOUR AGENCY THAT THE SHELBYVILLE CATALOGUES SHOW DESKS IDENTIFIED BY MODEL NUMBER WHICH DIFFER AS TO CONSTRUCTION AND MATERIAL, AND IT IS NOT POSSIBLE TO DETERMINE FROM KAMIN'S BID WHICH SHELBYVILLE DESK WAS OFFERED. IT WAS FURTHER INDICATED AT THE HEARING THAT, WHILE COMMERCIAL CATALOGUES WERE AVAILABLE ON WESTIN- NEILSEN AND SHELBYVILLE, NO CATALOGUES WERE FOUND COVERING STEIN LUMBER.

THE BOARD CONCLUDED THAT THE GOVERNMENT COULD NOT DETERMINE WITH EXACTNESS THE PRODUCTS KAMIN PROPOSED TO SUPPLY, AND THIS UNCERTAINTY RENDERED THE COMPANY'S BIDS UNACCEPTABLE.

UNDER THE TERMS OF THE INVITATIONS (CLAUSE 7, SUPRA) BIDDERS OFFERING "OR EQUAL" PRODUCTS WERE REQUIRED TO FURNISH INFORMATION SUFFICIENT TO ENABLE THE PURCHASING ACTIVITY TO DETERMINE EXACTLY WHAT THE BIDDER PROPOSED TO FURNISH AND WHAT THE GOVERNMENT WOULD BE BINDING ITSELF TO PURCHASE BY MAKING AN AWARD. WE AGREE WITH THE BOARD'S CONCLUSION THAT THE LOW BIDDER FAILED TO MEET THESE REQUIREMENTS. THE GOVERNMENT WAS NOT PROVIDED BY THE KAMIN BIDS WITH INFORMATION SUFFICIENT TO ENABLE IT TO DETERMINE EXACTLY WHAT WAS OFFERED IN PLACE OF NAME BRAND ITEMS. FOR THIS REASON THE KAMIN BIDS ARE UNACCEPTABLE. SEE 39 COMP. GEN. 595, 36 COMP. GEN. 415.

IN VIEW OF OUR CONCLUSION ON THIS POINT, IT BECOMES UNNECESSARY TO CONSIDER THE OTHER BASES FOR REJECTION OF THE KAMIN BIDS.

REGARDING THE QUESTION OF BID REJECTION AND READVERTISEMENT RAISED IN YOUR LETTER, WE AGREE WITH YOUR VIEW THAT SUCH ACTION WOULD HAVE BEEN OF DOUBTFUL PROPRIETY IN THIS CASE.

IT DOES APPEAR THAT THE PRICE DIFFERENCE BETWEEN THE BIDDER RECEIVING THE AWARDS AND THE OTHER BIDS, AMOUNTING TO ABOUT $21,000 (THE AWARDS WERE IN THE APPROXIMATE AMOUNT OF $117,000), WAS SUBSTANTIAL. HOWEVER, REJECTION OF ALL BIDS AFTER PRICES HAVE BEEN DISCLOSED GENERALLY CAN BE EXPECTED TO HAVE SERIOUS CONSEQUENCES AND IS AUTHORIZED ONLY "WHEN THE AGENCY HEAD DETERMINES THAT IT IS IN THE PUBLIC INTEREST SO TO DO.' (41 U.S.C. 253). AS YOU INDICATE, IT IS DOUBTFUL THAT REJECTION OF ALL BIDS AND READVERTISEMENT HERE WOULD HAVE BEEN IN THE BEST INTERESTS OF THE GOVERNMENT FROM THE STANDPOINT OF COST BECAUSE OF THE SPECULATIVE NATURE OF THE POSSIBLE SAVINGS, CONSIDERING THAT THE DIFFERENCES IN THE ITEMS OFFERED BY THE THREE BIDDERS MAY HAVE BEEN SUBSTANTIAL. YOU POINT OUT IN THAT REGARD THAT ADDITIONAL INFORMATION RECENTLY DEVELOPED INDICATES A LIKELIHOOD OF SUBSTANTIAL DEVIATIONS ON THE ALTERNATE ITEMS OFFERED BY THE LOW BIDS. YOU POINT OUT, ALSO, THAT AT THE TIME THE AWARDS WERE MADE THE CONTRACTING OFFICER WAS AWARE THAT THE AIR FORCE REQUIRED NECESSARY LEAD TIME TO ASSURE THAT THE EQUIPMENT WOULD BE DELIVERED BY THE DATES SPECIFIED.

UNDER THE CIRCUMSTANCES PRESENTED, WE CANNOT PROPERLY OBJECT TO THE ACTIONS TAKEN BY YOUR CONTRACTING OFFICER IN CONNECTION WITH THESE PROCUREMENTS.