ASBCA 59892

ARMED SERVICES BOARD OF CONTRACT APPEALS Appeal of-- ) ) Palco Distributing, LLC ) ASBCA No. 59892 ) Under Contract No. N61331-15-P-8502 ) APPEARANCE FOR THE APPELLANT: Mr. Brent Palmer Member APPEARANCES FOR THE GOVERNMENT: Ronald J. Borro, Esq. Navy Chief Trial Attorney James T. Shepherd, Esq. Trial Attorney Naval Surface Warfare Center Panama City, FL OPINION BY ADMINISTRATIVE JUDGE PAUL This a timely appeal of a contracting officer's (CO's) decision cancelling appellant Palco Distributing, LLC's (Palco's), purchase order in a total amount of $6,736.20. The Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109, is applicable. Palco opted to use the accelerated procedure provided by Board Rule 12.3, and the parties submitted the appeal on the record pursuant to Board Rule 11. We deny the appeal. SUMMARY FINDINGS OF FACT 1. On 29 October 2014, the Navy's Surface Warfare Center, Panama City, Florida, issued a request for quotations (RFQ) in the government's FedBid system for 20 piston/sleeve assemblies (R4, tab I at 1). The Navy employee responsible for issuing the original purchase request, Mr. Jason White, explained in his declaration that the piston/sleeve assemblies were to be used in emergency breathing air compressors (EBACs) which provided "compressed air for emergency breathing equipment that is used during damage control operations onboard U.S. Naval vessels" (White decl. at 1). 2. The RFQ specifically stated that the piston/sleeve assemblies had to be manufactured by Bauer Compressors, Inc. (Bauer), and had to bear Bauer part number 078043 (R4, tab 1 at 1, 3). Mr. White stated that "[n]o other piston/sleeve assemblies are suitable for use in the EBACs" (White decl. at 3). The RFQ made the Navy's intent to accept only Bauer assemblies even clearer by stating in the "Purchase Description: Exact Match Only" (R4, tab 1 at 1). On page 2 of the RFQ, "Exact Match Only" was defined as follows: The Buyer requires that Sellers bid "exact match to spec". That means that NO SUBSTITUTIONS are allowed. Sellers MUST provide the item requested in the line item description (exact make, model, part number and or description). If you are not able to deliver the line item as requested, DO NOT BID. Please advise the Buyer of issues through our "Submit a Question" button. (Id. at 2) 3. On or about 29 October 2014, the Navy received Bid No. 29489011 from Palco. It offered to supply "Piston/Sleeve Assembly for EBAC, PIN 078043," plus shipping costs, in a total amount of $6,736.20. The bid referred to "Bauer Compressors INC" and included the "Exact Match Only" language which was contained in the RFQ (R4, tab 2 at 1). As stated by the CO, Mr. Donald McManus, in his declaration, up to this point, Palco did not disclose its intent to ship anything other than the Bauer parts (McManus decl. at 2). 4. Palco's bid was the lowest which the Navy received (McManus decl. at 2). Accordingly, the Navy issued Purchase Order No. N61331-15-P-8502 to Palco in the total amount stated in its bid. Section F of the purchase order required Palco to deliver the assemblies by 14 November 2014. (R4, tab 3 at 1, 7) 5. On 11November2014, the Navy received the shipment of assemblies and an invoice from Palco and, on 19 November 2014, it rejected the shipment because the items were not what was ordered (app. rebuttal doc., attach. 6 at 2). Instead of shipping Bauer assemblies, Palco had forwarded parts manufactured by a company named Lawrence Factor. Mr. White, the Navy engineer, explained the Navy's rejection and subsequent cancellation decisions in these terms: However, the Lawrence Factor parts are not the same as the OEM Bauer parts required by the purchase order, nor are they equivalent to the Bauer parts. NSWC PCD had previously obtained Lawrence Factor parts to determine if they could be used as an alternate source of supply. However, after testing them, we determined that the Lawrence [F]actor parts were not suitable for use in the EBACs. Specifically, the piston rings in the Lawrence Factor parts had end gaps that were significantly larger than those on the Bauer parts.