Palco Distributing, LLC
Docket: ASBCA 59892
Decision date: 2015-10-22

ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of--
Palco Distributing, LLC 
Under Contract No. N61331-15-P-8502 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 59892 
Mr. Brent Palmer 
Member 
Ronald J. Borro, Esq. 
Navy Chief Trial Attorney 
Jam es 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: 
(Id. at 2) 
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. 
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. The larger ring end gaps 
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significantly reduced the efficiency of the compressors and 
also allowed unacceptable levels of compressor lubricating 
oil to enter the air that would be used in the emergency 
breathing devices (see Tab 4 of Appeal File). I notified the 
Buyer, Mr. Donald McManus, that Palco failed to deliver 
the items required by the contract and, on December 9, 
2014, asked him to cancel the purchase (Tab 5 of Appeal 
File). 
(White decl. at 2; see also R4, tab 4) 
6. Accordingly, the Navy advised Palco that it had delivered the wrong parts. 
(app. rebuttal doc., attach. 3 at 2). On 8 December 2014, Palco sent the Navy an 
unsolicited quote to provide the Bauer assemblies for a 
total price of $8,533.22 
(id., attach. 9 at 1, 3). The Navy did not accept this quote. 
7. On 17 December 2014, the Navy sent the Lawrence Factor assemblies back 
to Palco (app. rebuttal doc., attach. 10). On 2 January 2015, Palco advised the Navy 
that it would not sign a bilateral modification cancelling the purchase order; instead, it 
forwarded a settlement proposal in a 
total amount of $4,254.43 (R4, tab 7). 
8. On 4 February 2015, the Navy issued a unilateral modification cancelling 
the purchase order at no cost to either party (R4, tab 9). This appeal followed. 
DECISION 
Palco's sole argument on appeal is that the RFQ issued by FedBid contained no 
references to Bauer. In support of its contention, Palco attached a FedBid document of 
unknown origin to its brief. We reject this argument. The RFQ contained in the 
Rule 4 file clearly referenced not only Bauer's corporate name but also the Bauer part 
number. In addition, it specified that the offered assemblies were to be "Exact Match 
Only" (finding 2). Moreover, in its bid, Palco referred to Bauer's corporate name, 
referenced the Bauer part number, and contained the "Exact Match Only" language 
(finding 3). Clearly despite its contentions, Palco was aware of the RFQ's specific 
requirements. 1 
1We reject the Navy's argument that the purchase order did not constitute a binding 
contract. Through the purchase order, the Navy accepted Palco's bid. Further, 
Palco's delivery of Lawrence Factor assemblies, even though they did not 
conform to the purchase order's requirements, constituted additional evidence 
supporting a binding contract. 
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Even if the contract permitted it, this is not an instance where a bidder offered 
an equivalent product. As explained by Mr. White, the Navy had previously examined 
the Lawrence Factor assemblies and determined that they "were not suitable for use in 
the EBACs" because the "piston rings in the Lawrence [F]actor parts had end gaps that 
were significantly larger than those on the Bauer parts" (finding 5). On 
this basis, the 
Navy correctly cancelled the purchase order at no cost to either party. 
The appeal is denied. 
Dated: 22 October 2015 
Icon~ 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
CONCLUSION 
MICHAEL T. PAUL 
Administrative Judge 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 59892, Appeal of Palco 
Distributing, LLC, rendered in conformance with the Board's Charter. 
Dated: 
4 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals