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B-212158 1 (1984-04-25)

handle is hein.gao/gaobadlrz0001 and id is 1 raw text is: - Cc~vx# K 672 THE COMPTROLLER GENERAL DECISION . . OF THE UNITED STATUE WASHINQTON. D. C. 20548 FILE: B-212158 DATE: April 25, 1984 MATTER OF: Wheeler Brothers, Inc. DIGEST: GAO recommends that the agency omit from a spare parts solicitation a clause providing that a contractor's percentage profit on substitute parts must be the same as that for name brand parts; the clause was intended to benefit the government by preventing contractors from reaping excessive profits on substitute parts, but in fact operates to the government's overall detriment by preventinq offerors from factoring lower cost substitute parts into their proposed prices, and by creating a competitive advantage for the name brand manufacturer and its distributors. Wheeler Brothers, Inc. protests the award of any contract under request for proposals (RFP) No. DLA700- 83-R-0281, issued by the Defense Logistics Agency (DLA) for automotive and truck parts. Wheeler contends that an RFP clause limiting an offeror's markup over its cost of the parts unduly restricts competition and pre- vents the government from receiving the lowest possible prices for parts. We sustain the protest. The RFP contemplated the award of a 1-year (plus two 1-year options) automated indefinite delivery type contract for supplying auto and truck replacement parts manufactured by or for Chrysler Corporation. Offers were to be expressed as percentage discounts off the Chrysler Corporation Master Parts Price List, to be applied to all parts ordered under the contract. The firm offering the largest discount would, if otherwise eligible, receive the award. Although DLA's require- ment was expressed in terms of Chrysler parts, the agency recognized that its needs could be met by non-Chrysler, substitute parts if those parts were interchangeable with Chrysler parts. The RFP thus provided that substitute parts could be supplied if listed in interchange catalogs

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