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B-165179, B-165800, DEC. 16, 1969

B-165179,B-165800 Dec 16, 1969
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QUALIFIER MANUFACTURER OF PRODUCT OFFERED BIDDER REPRESENTED UNDER QUALIFIED PRODUCTS LIST (QPL) PROCUREMENT THAT IT MANUFACTURED HONEYCOMB CORE IN TOW TARGETS WHEREAS HONEYCOMB WAS MANUFACTURED BY ANOTHER FIRM. SINCE QUALIFICATION FOR INCLUSION ON QPL WAS NOT DEPENDENT ON QUALIFIER MANUFACTURING ITS OWN HONEYCOMB. AS LONG AS BIDDER MET REQUIREMENTS PRODUCT COULD HAVE QUALIFIED USING ANOTHER MANUFACTURER'S PRODUCT. THIS APPARENTLY WAS NOT DONE. BOTH BIDDER AND CONTRACTING OFFICER BELIEVING ITEM BEING FURNISHED WAS ON QPL BUT BECAUSE ANY DEFICIENCIES IN PERFORMANCE OR QUALIFICATION ARE OF FORM RATHER THAN SUBSTANCE GAO IS NOT JUSTIFIED IN TAKING ANY ACTION WITH RESPECT TO PAST OR EXISTING CONTRACTS.

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B-165179, B-165800, DEC. 16, 1969

SPECIFICATIONS--QUALIFIED PRODUCTS--QUALIFIER MANUFACTURER OF PRODUCT OFFERED BIDDER REPRESENTED UNDER QUALIFIED PRODUCTS LIST (QPL) PROCUREMENT THAT IT MANUFACTURED HONEYCOMB CORE IN TOW TARGETS WHEREAS HONEYCOMB WAS MANUFACTURED BY ANOTHER FIRM. SINCE QUALIFICATION FOR INCLUSION ON QPL WAS NOT DEPENDENT ON QUALIFIER MANUFACTURING ITS OWN HONEYCOMB, AS LONG AS BIDDER MET REQUIREMENTS PRODUCT COULD HAVE QUALIFIED USING ANOTHER MANUFACTURER'S PRODUCT. HOWEVER, THIS APPARENTLY WAS NOT DONE, BOTH BIDDER AND CONTRACTING OFFICER BELIEVING ITEM BEING FURNISHED WAS ON QPL BUT BECAUSE ANY DEFICIENCIES IN PERFORMANCE OR QUALIFICATION ARE OF FORM RATHER THAN SUBSTANCE GAO IS NOT JUSTIFIED IN TAKING ANY ACTION WITH RESPECT TO PAST OR EXISTING CONTRACTS. SEE 41 COMP. GEN. 124.

TO CHAPMAN, DISALLE AND FRIEDMAN:

THIS CONCERNS YOUR LETTER OF OCTOBER 27, 1969, REQUESTING RECONSIDERATION OF OUR DECISION, B-165179, B-165800, DATED OCTOBER 10, 1969. YOUR LETTER TRANSMITTED FOR OUR CONSIDERATION A LETTER OF OCTOBER 20, 1969, FROM MR. T. PAUL JONES, PRESIDENT OF PANEL CORPORATION OF AMERICA (PANCOA), WHICH SET FORTH THE GROUNDS FOR RECONSIDERATION.

THE SURROUNDING FACTS AND CIRCUMSTANCES WERE SET OUT IN DETAIL IN OUR AFOREMENTIONED DECISION AND WILL NOT BE REPEATED. HOWEVER, IN BRIEF, PANCOA ALLEGES THAT, IN SUBMITTING A TOW TARGET ITEM FOR INCLUSION ON A QUALIFIED PRODUCTS LIST (QPL), ELLINOR CORPORATION OF DALLAS, TEXAS (ELLINOR), REPRESENTED THAT IT HAD MANUFACTURED THE HONEYCOMB CORE, WHILE IN FACT THE HONEYCOMB HAD BEEN MANUFACTURED BY ANOTHER FIRM. AS A RESULT OF THAT ACTION, ELLINOR WAS ALLOWED TO BID AND OBTAIN CONTRACTS UNDER VARIOUS SOLICITATIONS ALTHOUGH PANCOA CONTENDS THAT (1) ELLINOR HAS NEVER TRULY "QUALIFIED" ITS TOW TARGETS UNDER THE SPECIFICATIONS AND IS ACCORDINGLY NOT ELIGIBLE TO RECEIVE AN AWARD FOR THE PRODUCTION OF SUCH TOW TARGETS, AND (2) ELLINOR IS PRODUCING AND FURNISHING THE GOVERNMENT A TYPE OF TOW TARGET FOR WHICH IT NEVER RECEIVED QUALIFICATION APPROVAL. THE LETTER OF OCTOBER 20, 1969, SUMMARIZES THE EVIDENCE TO SUBSTANTIATE THE CONTENTION THAT ELLINOR DID NOT USE ITS OWN HONEYCOMB CORE FOR PURPOSES OF QUALIFICATION.

IN ORDER PROPERLY TO ESTABLISH WHETHER THE HONEYCOMB IN THE PANELS SUBMITTED BY ELLINOR FOR QUALIFICATION WAS MANUFACTURED BY THAT FIRM AS INDICATED IN THE PROCESS SPECIFICATION OR WAS OBTAINED FROM AN OUTSIDE SOURCE, IT WOULD BE NECESSARY TO GIVE THE PARTIES AN OPPORTUNITY TO PRESENT WRITTEN AND ORAL EVIDENCE INCLUDING EXPERT TESTIMONY, TO CROSS EXAMINE WITNESSES AND TO OTHERWISE OBSERVE THE USUAL PROCEDURES FOLLOWED IN JUDICIALLY OR ADMINISTRATIVELY ESTABLISHING MATTERS OF FACT. WE DO NOT HAVE THE AUTHORITY OR FACILITIES TO HOLD SUCH HEARINGS. HOWEVER, EVEN ASSUMING THE TRUTH OF PANCOA'S ASSERTIONS, WE SERIOUSLY QUESTION WHETHER IN THE CIRCUMSTANCES OUR OFFICE WOULD BE JUSTIFIED IN TAKING ANY ACTION ON CONTRACTS ALREADY AWARDED.

WE UNDERSTAND THAT QUALIFICATION FOR INCLUSION ON THE QPL WAS NOT DEPENDENT ON THE QUALIFIER MANUFACTURING HIS OWN HONEYCOMB. IN OTHER WORDS, ELLINOR COULD HAVE QUALIFIED AS READILY USING HONEYCOMB PRODUCED BY ANOTHER MANUFACTURER SO LONG AS IT MET THE REQUIREMENTS. THEREFORE, EVEN ACCEPTING PANCOA'S ALLEGATIONS AS CORRECT, ELLINOR WOULD HAVE BEEN PLACED ON THE QPL WHETHER IT REPRESENTED THE HONEYCOMB AS OF ITS OWN MANUFACTURE OR OF ANOTHER'S. IT MAY BE ARGUED HOWEVER, THAT ELLINOR OBTAINED AN UNDUE ADVANTAGE BY QUALIFYING A PRODUCT WITH A HONEYCOMB ACTUALLY PRODUCED BY ANOTHER FIRM THOUGH REPRESENTED AS ITS OWN BECAUSE AT THE TIME OF QUALIFICATION IT WAS NOT IN A POSITION TO MANUFACTURE HONEYCOMB MEETING THE QPL. ON THE OTHER HAND, UTILIZING ANOTHER FIRM'S HONEYCOMB IN ACTUAL PRODUCTION UNDER A CONTRACT WOULD PRESUMABLY BE MORE EXPENSIVE. THEREFORE, IT IS POSSIBLE THAT ELLINOR OBTAINED AN UNDUE ADVANTAGE BY QUALIFYING UNDER A MORE EXPENSIVE MANNER OF PRODUCTION WHILE RESERVING THE RIGHT TO PERFORM UNDER A MORE ECONOMICAL METHOD.

WE BELIEVE THAT AWARD AND ACCEPTABLE PERFORMANCE UNDER A FORMALLY ADVERTISED QPL PROCUREMENT REQUIRE 3 THINGS: (1) THAT THE PRODUCT OFFERED BY THE BIDDER MUST BE ON THE QPL OR HAVE BEEN CERTIFIED FOR PLACEMENT THEREON AT THE TIME OF BID OPENING, (2) THAT THE CONTRACTOR MUST FURNISH AN ITEM WHICH IS ON THE QPL AT THE TIME OF PERFORMANCE AND (3) WHICH SATISFIES THE CONTRACT SPECIFICATIONS. WE DO NOT CONSTRUE THE QPL REGULATIONS TO REQUIRE THAT THE QPL ITEM WHICH QUALIFIED THE CONTRACTOR TO BID MUST BE THE SAME ITEM FURNISHED UNDER THE CONTRACT. CF. 41 COMP. GEN. 124 (1961). THE AIR FORCE HAS CONCLUDED, BASED ON INSPECTIONS, ACTUAL USE OF THE PRODUCT AND FACING/CORE PEEL TESTS PERFORMED IN ACCORDANCE WITH MIL -T-9918A, THAT THE PRODUCT BEING FURNISHED BY ELLINOR UNDER EXISTING CONTRACTS WOULD QUALIFY FOR INCLUSION ON THE QPL. IT APPEARS REASONABLE TO ASSUME, THEREFORE, THAT PRIOR TO PERFORMANCE ON CURRENT CONTRACTS ELLINOR COULD HAVE QUALIFIED FOR INCLUSION ON THE QPL A TOW TARGET USING THE HONEYCOMB CURRENTLY BEING FURNISHED ASSUMING, AGAIN, THAT IT IN FACT DIFFERS FROM THE PRODUCT WHICH WAS QUALIFIED). APPARENTLY THIS WAS NOT DONE BECAUSE BOTH ELLINOR AND THE AIR FORCE CONSIDERED THAT THE ITEM BEING FURNISHED UNDER CONTRACT WAS ALREADY ON THE QPL. THEREFORE, EVEN ASSUMING THE FACTS ALLEGED BY PANCOA, ANY DEFICIENCIES IN ELLINOR'S PERFORMANCE OR QUALIFICATION ARE OF FORM RATHER THAN OF SUBSTANCE AND DO NOT JUSTIFY ANY ACTION ON THE PART OF OUR OFFICE WITH RESPECT TO PAST OR EXISTING CONTRACTS.

SINCE THE QPL SYSTEM REPRESENTS A RESTRICTION ON FREE AND OPEN COMPETITION, WHICH WE HAVE CONDONED ON THE BASIS OF PRACTICAL NECESSITY, IT SHOULD IN OUR VIEW BE CONSTRUED SO AS TO LIMIT SUCH RESTRICTION TO THE EXTENT REQUIRED TO SERVE THE INTENDED PURPOSES. THIS IS NOT TO SAY THAT QPL REQUIREMENTS CAN BE DISREGARDED WITH IMPUNITY. THE PROVISIONS OF APPENDIX IV-A OF DEFENSE STANDARDIZATION MANUAL 4120.3M RELATING TO PLACEMENT ON AND REMOVAL FROM THE QPL, QUOTED IN OUR EARLIER DECISION, SHOULD BE STRICTLY FOLLOWED. AS WE STATED IN OUR EARLIER DECISION:

"SHOULD IT BE DETERMINED AT ANY TIME THAT THE QUALIFICATION PRODUCT WAS MISREPRESENTED IN ANYWAY, CORRECTIVE ACTION IS AN ADMINISTRATIVE MATTER, AND IN A PROPER CASE MAY FORM A BASIS FOR REMOVAL FROM THE QUALIFIED PRODUCTS LIST OR FOR PLACEMENT OF THE OFFENDER ON THE DEBARRED BIDDERS LIST: * *"

ANY ACTION FOR FRAUD WOULD, OF COURSE, BE A MATTER FOR CONSIDERATION BY THE DEPARTMENT OF JUSTICE AND NOT WITHIN THE JURISDICTION OF OUR OFFICE.

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