B-168629, JUNE 19, 1970, 49 COMP. GEN. 857

B-168629, JUNE 19, 1970, 49 COMP. GEN. 857

BIDS -- TWO-STEP PROCUREMENT -- TECHNICAL PROPOSALS -- QUALIFICATION REQUIREMENTS THE "BIDDER'S TECHNICAL QUALIFICATION CLAUSE" INCLUDED IN THE SPECIFICATIONS CONTAINED IN A LETTER REQUEST FOR TECHNICAL PROPOSALS, ISSUED AS THE FIRST STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT, THAT STIPULATED TECHNICAL PROPOSALS WOULD BE ACCEPTED ONLY FROM "THOSE CONTRACTORS WHO HAVE MANUFACTURED AND CAN DEMONSTRATE AT AN OPERATING AIRFIELD A SOLID STATE CONVENTIONAL INSTRUMENT LANDING SYSTEM" DUE TO THE UNIQUE PROBLEMS INVOLVED IN ADAPTING A TWO-FREQUENCY LOCALIZER TO THE SYSTEM--CONSIDERED ENGINEERING AND NOT DEVELOPMENT WORK--WAS NOT RESTRICTIVE OF COMPETITION BECAUSE ONE BIDDER COULD NOT MEET THE MINIMUM REQUIREMENTS OF THE PROCUREMENT, AND THE CONTRACTING AGENCY'S DETERMINATION OF ITS NEEDS IS NOT QUESTIONABLE IN THE ABSENCE OF DEMONSTRATED FRAUD OR CLEARLY CAPRICIOUS ACTION. BIDS -- TWO-STEP PROCUREMENT -- USE BASIS THE UTILIZATION OF COMMERCIALLY AVAILABLE COMPONENTS TO MEET THE REQUIREMENTS FOR AN INSTRUMENT LANDING SYSTEM STATED IN A LETTER REQUEST FOR TECHNICAL PROPOSALS, ISSUED AS THE FIRST-STEP OF A TWO-STEP ADVERTISED PROCUREMENT, AND TO ADAPT A TWO-FREQUENCY LOCALIZER TO THE SYSTEM, DOES NOT MAKE THE USE OF THE TWO-STEP PROCUREMENT METHOD IMPROPER AS THE ITEMS USED WERE NOT THE "OFF-THE-SHELF" ITEMS THAT CAN BE STATED SUFFICIENTLY DEFINITE IN SPECIFICATIONS TO PERMIT FULL AND FREE COMPETITION WITHOUT THE TECHNICAL EVALUATIONS CONTEMPLATED BY PARAGRAPH 2-502(A)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION REGARDING TWO-STEP PROCUREMENT AS NEITHER THE PRECISE SYSTEM NOR THE LOCALIZER TO BE ADAPTED WERE AVAILABLE COMMERCIALLY. FURTHERMORE, THE MORE CONVENTIONAL FORM OF ADVERTISING WOULD DELAY DELIVERY, AND 10 U.S.C 2304(A) REQUIRES A METHOD OF FORMAL ADVERTISING INSTEAD OF NEGOTIATION WHEN FEASIBLE AND PRACTICABLE. BIDS -- MULTI-YEAR -- URGENCY OF PROCUREMENT NEITHER THE ANTICIPATION BY A MANUFACTURER FOUND NONRESPONSIVE TO THE "BIDDER'S TECHNICAL QUALIFICATION CLAUSE" CONTAINED IN THE FIRST STEP OF A TWO-STEP MULTI-YEAR PROCUREMENT FOR AN INSTRUMENT LANDING SYSTEM THAT IT COULD MEET THE CRITERIA OF THE CLAUSE AT AN UNSPECIFIED FUTURE DATE, NOR THE URGENCY OF THE PROCUREMENT WARRANTS CANCELLATION OF THE MULTI-YEAR PROCUREMENT AND THE REISSUANCE OF THE INVITATION FOR THE FIRST YEAR'S REQUIREMENTS. THERE IS NO ASSURANCE THE MANUFACTURER WILL QUALIFY IN TIME FOR THE FIRST YEAR'S REQUIREMENTS, AND THE FACT THAT A PROCUREMENT IS URGENTLY NEEDED DOES NOT NECESSARILY MEAN A MULTI-YEAR PROCUREMENT IS INAPPROPRIATE, AND PARTICULARLY WHERE THE USE OF THE MULTI-YEAR TECHNIQUE APPEARS TO OFFER MORE TIMELY DELIVERY THAN SEPARATE SINGLE-YEAR CONTRACTS.

TO SELLERS, CONNER & CUNEO, JUNE 19, 1970:

REFERENCE IS MADE TO LETTERS DATED DECEMBER 19, 1969, AND FEBRUARY 17, 1970, FROM AIL DIVISION OF CUTLER HAMMER, INCORPORATED (AIL) AND TO YOUR LETTERS OF MARCH 16 AND MAY 15, 1970, IN BEHALF OF AIL, PROTESTING AS UNDULY RESTRICTIVE THE SPECIFICATIONS OF LETTER REQUEST FOR TECHNICAL PROPOSALS NO. F33657-70-R-0166 (IRTP-0166) ISSUED BY HEADQUARTERS, AERONAUTICAL SYSTEMS DIVISION, WRIGHT-PATTERSON AIR FORCE BASE, OHIO.

LRTP-0166, ISSUED TO SIX FIRMS ON OCTOBER 9, 1969, AS THE FIRST STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT REQUESTED TECHNICAL PROPOSALS FOR 63 SOLID-STATE INSTRUMENT LANDING SYSTEMS (ILS). PARAGRAPH 3 OF THE SOLICITATION PROVIDED:

3. THIS PROCUREMENT WILL BE ACCOMPLISHED IN TWO DISTINCT STEPS: (1) SOLICITATION, SUBMISSION AND EVALUATION OF DETAILED TECHNICAL PROPOSALS WITHOUT PRICING TO DETERMINE ACCEPTABILITY OF THE PRODUCTS OFFERED, AND (2) ISSUANCE OF A FORMAL INVITATION FOR BIDS ONLY TO THOSE FIRMS HAVING ACCEPTABLE TECHNICAL PROPOSALS. BIDDERS WHO CANNOT COMPLY WITH THE ATTACHED BIDDERS QUALIFICATION CLAUSE SHOULD NOT SUBMIT A TECHNICAL PROPOSAL.

BIDDERS TECHNICAL QUALIFICATION CLAUSE

SOLID STATE INSTRUMENT LANDING SYSTEM

TECHNICAL PROPOSALS WILL BE ACCEPTED ONLY FROM THOSE CONTRACTORS WHO HAVE MANUFACTURED AND CAN DEMONSTRATE AT AN OPERATING AIRFIELD A SOLID STATE CONVENTIONAL INSTRUMENT LANDING SYSTEM. THE SYSTEM MUST BE COMPRISED OF AT LEAST THE FOLLOWING COMPONENTS: A TWO-FREQUENCY (CAPTURE EFFECT), DUAL EQUIPMENT VHF LOCALIZER STATION; A SINGLE FREQUENCY, DUAL EQUIPMENT UHF GLIDESLOPE STATION; AND A VHF MARKER BEACON STATION. THE SYSTEM MUST HAVE SUCCESSFULLY PASSED A FLIGHT CHECK FOR CATEGORY I SIGNAL QUALITY CONDUCTED BY THE FAA OR OTHER INTERNATIONAL CIVIL AVIATION ORGANIZATION RECOGNIZED FLIGHT CHECKING AGENCY. INSPECTION OF SUCH A SYSTEM BY THE GOVERNMENT WILL BE CONDUCTED BY GOVERNMENT ENGINEERS AND TECHNICIANS. THE INSPECTION WILL BE PART OF THE EVALUATION OF TECHNICAL PROPOSALS. FURTHER INFORMATION ON THE ARRANGEMENT FOR SUCH AN INSPECTION IS CONTAINED IN ATTACHMENT NR. 1.

BY LETTER OF OCTOBER 24, 1969, AIL REQUESTED A WAIVER OF THE REQUIREMENT THAT IT "HAVE MANUFACTURED AND CAN DEMONSTRATE" A SYSTEM WHICH INCLUDED A TWO-FREQUENCY (CAPTURE EFFECT) LOCALIZER STATION. THE REQUEST WAS DENIED BY THE AIR FORCE ON NOVEMBER 5, 1969. ON NOVEMBER 20, 1969, AIL FORMALLY PROTESTED TO THE AIR FORCE AGAINST THIS REQUIREMENT. IN DENYING AIL'S PROTEST ON DECEMBER 1, 1969, THE AIR FORCE REPLIED:

WERE THE AIR FORCE TO REMOVE ANY OF THE PROVISIONS OF THIS CLAUSE, THERE WOULD BE NO ASSURANCE THAT THE DESIRED SYSTEMS WOULD BE RECEIVED. FACT, THE CONTRACT MIGHT BECOME A DEVELOPMENT CONTRACT RATHER THAN A CONTRACT FOR THE PURCHASE OF A MODIFIED COMMERCIAL EQUIPMENT.

ON DECEMBER 10, 1969, AIL PROTESTED TO OUR OFFICE CONTENDING, AS IT HAD CONTENDED TO THE AIR FORCE, THAT THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE" UNNECESSARILY RESTRICTED COMPETITION. IT IS THE POSITION OF AIL THAT THE TECHNIQUES FOR PRODUCING A TWO-FREQUENCY (CAPTURE EFFECT) LOCALIZER ARE WELL-DEVELOPED AND COMMONLY ACCOMPLISHED. ALTHOUGH AIL CANNOT SATISFY THE REQUIREMENT THAT IT "HAVE MANUFACTURED AND CAN DEMONSTRATE" SUCH A LOCALIZER, AIL ASSERTS THAT IT CAN PROVIDE THE EQUIPMENT DESIRED WITHIN THE CONTRACT SCHEDULE. THUS, AIL VIEWS THE QUALIFICATION CLAUSE AS A TECHNICALLY INVALID REQUIREMENT WHICH HAS NEEDLESSLY RESTRICTED COMPETITION TO TWO OR THREE FIRMS, ONLY ONE OF WHICH IS AMERICAN.

AN ILS CONSISTS OF THREE SUBSYSTEMS: A GLIDESCOPE STATION; A LOCALIZER STATION AND MARKER BEACONS. A GLIDESCOPE STATION PROVIDES VERTICAL GUIDANCE TO AN AIRCRAFT DURING ITS LANDING APPROACH. THE LOCALIZER STATION PROVIDES LATERAL OR HORIZONTAL GUIDANCE TO THE AIRCRAFT AND THE MARKER BEACONS SERVE AS "CHECKPOINTS" FOR THE APPROACH TO THE AIRFIELD. ADDITIONALLY, A MONITOR SYSTEM WHICH SAMPLES THE GUIDANCE SIGNAL, UPON DETECTING A FAULT IN THE SIGNAL, TAKES APPROPRIATE ACTION SUCH AS PROVIDING AN ALARM IN THE CONTROL TOWER OR SWITCHING A SYSTEM TO A REDUNDANT UNIT. THE SYSTEMS CURRENTLY IN USE BY THE AIR FORCE ARE 15 YEARS OLD AND ARE IN "PERFORMANCE CATEGORY I." A CATEGORY I ILS IS CAPABLE OF SAFELY GUIDING AN AIRCRAFT TO A DECISION HEIGHT OF 200 FEET, AT WHICH THE LANDING IS ABORTED IF THE PILOT CANNOT SEE THE RUNWAY. SINCE CATEGORY I SYSTEMS WERE DEEMED INADEQUATE FOR USE WITH THE C-5A AND C-141 AIRCRAFT, THE INSTANT PROCUREMENT WAS INITIATED FOR CATEGORY II SYSTEMS, WHICH CAN GUIDE AIRCRAFT TO A DECISION HEIGHT OF 100 FEET.

THE AIR FORCE ALSO MADE THE DETERMINATION, WITH WHICH AIL AGREES; THAT THE ACCURACY OF THE ILS WOULD BE INCREASED IF A TWO-FREQUENCY (CAPTURE EFFECT) LOCALIZER WERE USED INSTEAD OF THE LESS SOPHISTICATED SINGLE FREQUENCY LOCALIZER. HOWEVER, AIL DISAGREES WITH THE NECESSITY FOR THE FURTHER REQUIREMENT OF THE AIR FORCE THAT PROSPECTIVE BIDDERS MUST HAVE MANUFACTURED AND MUST DEMONSTRATE AN OPERATING ILS SYSTEM WHICH INCLUDES A TWO-FREQUENCY LOCALIZER. THE FEDERAL AVIATION ADMINISTRATION, WITH WHICH THIS PROCUREMENT WAS COORDINATED, ADVISED THE AIR FORCE WITH REGARD TO THE DEMONSTRATION REQUIREMENT:

PAST EXPERIENCE HAS CLEARLY DEMONSTRATED THAT THE MAIN PROBLEMS (NEGLECTING THE SITING) IN AN ILS ARE NOT IN ACHIEVING INDIVIDUAL UNIT PERFORMANCE, BUT IN ACHIEVING OVERALL SYSTEM PERFORMANCE AND STABILITY. THE MOST DIFFICULT POTENTIAL PROBLEMS SUCH AS IMPROPER ANTENNA PATTERNS, INADEQUATE MONITOR RESPONSE, UNSTABLE MONITOR INDICATIONS UNDER RAIN CONDITIONS, AND RF LEAKAGE CAN ONLY BE OBSERVED WITH THE SIGNALS BEING RADIATED AND PICKED UP BY THE MONITOR SYSTEM AND BY FLIGHT INSPECTION AIRCRAFT.

RECENT FEDERAL AVIATION ADMINISTRATION EXPERIENCES IN ILS PROCUREMENT IS ASSOCIATED WITH SEVERAL CONTRACTS FOR LOW COST ILS EQUIPMENT, SPECIFICALLY DIRECTED TOWARD CATEGORY I PERFORMANCE. WHILE WE RECOGNIZE THAT CATEGORY II REQUIREMENTS ARE FAR MORE STRINGENT, WE BELIEVE OUR EXPERIENCE WITH CATEGORY I SYSTEMS IS IN MANY WAYS REPRESENTATIVE. WE CURRENTLY HAVE THREE ACTIVE CONTRACTS FOR PRODUCTION QUANTITIES OF ILS. ALL ARE FOR COMPLETE SYSTEMS AND ONE INCLUDES CONTRACTOR INSTALLATION (TURNKEY).

THE FIRST CONTRACT TO BE AWARDED WAS TO WILCOX FOR 19 COMPLETE SYSTEMS AND 11 ADDITIONAL PARTIAL SYSTEMS CONSISTING OF LOCALIZER AND MARKERS. THE CONTRACT WAS AWARDED ON 30 APRIL 1968 WITH INITIAL DELIVERY SPECIFIED TO BE EIGHT MONTHS AFTER AWARD. DELAYS BY THE CONTRACTOR DELAYED DELIVERY UNTIL SEPTEMBER 1969 WHEN THE FIRST SYSTEM WAS DELIVERED TO TAMPA, FLORIDA FOR FAA ACCEPTANCE FLIGHT TESTING. ALTHOUGH THE ELECTRONIC EQUIPMENT "LOOKS GOOD" AND APPARENTLY MEETS THE REQUIRED PERFORMANCE, THE LOCALIZER SIGNAL AS MEASURED IN FLIGHT HAS AS YET UNEXPLAINED DIFFICULTIES AND THE SYSTEM IS NOT YET ACCEPTED. WE DO NOT KNOW THE EXTENT OF MODIFICATION NECESSARY TO CORRECT THE DEFICIENCIES WHICH COULD NOT HAVE BEEN DETERMINED IN ANY MANNER EXCEPT BY AN INSTALLED SYSTEM FLOWN BY A FLIGHT INSPECTION AIRCRAFT.

A SECOND CONTRACT WAS AWARDED ON 19 FEBRUARY 1969 TO AIL FOR 10 "TURNKEY" INSTRUMENT LANDING SYSTEMS WITH THE FIRST INSTALLATION IN SEPTEMBER 1969. THESE SYSTEMS ARE COMMERCIAL QUALITY SYSTEMS NOT BUILT TO NORMAL GOVERNMENT SPECIFICATIONS, BUT ARE REQUIRED TO MEET ICAO CATEGORY I PERFORMANCE. ALTHOUGH INITIAL DELIVERY WAS ESSENTIALLY ON SCHEDULE THE INSTALLATIONS HAVE HAD CONTINUING PROBLEMS WHICH ARE ASSOCIATED WITH BOTH THE EQUIPMENT AND THE SYSTEM INTEGRATION. THE FIELD INSTALLATIONS HAVE SHOWN THE NECESSITY FOR DESIGN CHANGES TO ACHIEVE THE DESIRED PERFORMANCE.

OUR THIRD CONTRACT WAS AWARDED TO AIL ON 30 JUNE 1969 AND IS FOR 99 SYSTEMS WITH DELIVERY STARTING SEPTEMBER 1970. THESE SYSTEMS ARE BUILT TO FAA SPECIFICATIONS, COVERING CATEGORY I PERFORMANCE REQUIREMENTS. IT IS STILL TOO EARLY IN THE CONTRACT TO PREDICT ANY PROBLEMS; HOWEVER, IT SHOULD BE NOTED THAT 14 MONTHS ARE SCHEDULED TO OBTAIN THE FIRST DELIVERY.

FROM THE ABOVE, WE BELIEVE THAT IN ORDER TO HAVE ANY HOPE OF ACHIEVING AN EARLY DELIVERY FOR CATEGORY II SYSTEMS, THE BID REQUIREMENT FOR A FIELD DEMONSTRATION OF SYSTEMS MEETING AT LEAST CATEGORY I REQUIREMENT IS VALID.

IN ADDITION, THERE IS REASON TO BELIEVE THAT A TWO FREQUENCY LOCALIZER, ESPECIALLY IF OPERATED ON THE QUADRATURE PRINCIPLE, MAY PRESENT UNIQUE PROBLEMS AND THEREFORE, DEMONSTRATION OF SUCH A SYSTEM WOULD BE ADVANTAGEOUS.

THE AIR FORCE INITIALLY CONTEMPLATED PURCHASING SOLID-STATE CATEGORY II SYSTEMS WITH TWO-FREQUENCY LOCALIZERS FROM FIRMS WHICH HAD MANUFACTURED AND COULD DEMONSTRATE SUCH SYSTEMS. THIS APPROACH WAS REJECTED AS TOO RESTRICTIVE SINCE ONLY TWO FOREIGN FIRMS, AND NO AMERICAN FIRMS, COULD MEET SUCH REQUIREMENTS. INSTEAD, THE AIR FORCE CONCLUDED THAT A CATEGORY I SYSTEM WITH TWO-FREQUENCY LOCALIZER WOULD BE UPGRADED TO CATEGORY II PERFORMANCE THROUGH MODIFICATION OF THE MONITORING SYSTEM. THE REQUIREMENT FOR THE PRIOR MANUFACTURE AND DEMONSTRATION OF SUCH A SYSTEM WAS INCORPORATED INTO THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE." AIL SUBMITTED A TECHNICAL PROPOSAL AND DEMONSTRATED AN ILS OF ITS MANUFACTURE. BY LETTER OF FEBRUARY 10, 1970, THE AIR FORCE INFORMED AIL THAT ITS PROPOSAL WAS CONSIDERED NONRESPONSIVE SINCE THE LOCALIZER WHICH WAS DEMONSTRATED WAS NOT OF THE CAPTURE EFFECT TYPE.

THE INITIAL ADMINISTRATIVE REPORT OF THE AIR FORCE, DATED FEBRUARY 25, 1970, ASSERTED:

SINCE THE AIR FORCE IS NOT PERMITTED TO DEVELOP ILS SYSTEMS (UNDER THE FEDERAL AVIATION ACT OF 1958, 72 STAT. 731 (CODIFIED IN SCATTERED SECTIONS OF 49 U.S.C.)) IT WAS DECIDED TO RELY ON INDUSTRY DEVELOPMENT EFFORTS OVER THE PAST 15 YEARS AND PURCHASE AN ILS FROM ONE OF THE SOURCES PRESENTLY MARKETING A SOLID STATE, CATEGORY I ILS WITH DUAL FREQUENCY LOCALIZER. THIS WOULD INSURE THAT NO DEVELOPMENT WORK WOULD BE REQUIRED ON THE BASIC ILS AND ONLY THE MONITOR SYSTEM WOULD NEED TO BE MODIFIED TO UPGRADE AN EXISTING PRODUCT TO ACHIEVE CATEGORY I PERFORMANCE.

YOUR LETTER OF MARCH 16, 1970, RESPONDING TO THE ADMINISTRATIVE REPORT, CONTENDED THAT THE TECHNIQUES FOR PRODUCING A TWO-FREQUENCY LOCALIZER ARE "A WELL DEVELOPED TECHNOLOGY THAT IS FULLY UNDERSTOOD AND COMMONLY ACCOMPLISHED." YOU MAINTAINED THAT THE MANUFACTURE OF THIS EQUIPMENT REQUIRED DESIGN ENGINEERING EFFORT RATHER THAN DEVELOPMENT. WE REQUESTED THE AIR FORCE TO COMMENT UPON YOUR LETTER, AND IN A SUPPLEMENTAL REPORT DATED APRIL 27, 1970, THAT DEPARTMENT STATED:

ALTHOUGH DIFFERING IN LANGUAGE, WE AGREE THAT THE INSTANT PROCUREMENT ACTION DOES NOT INVOLVE "DEVELOPMENT" AS NORMALLY UNDERSTOOD OR DEFINED IN AFM 11-1. IT DOES REQUIRE APPLICATION OF QUALIFIED DESIGN ENGINEERING TO PRODUCE AN OPERATING SYSTEM FROM EXISTING STATE-OF-THE ART COMPONENTS TO ACHIEVE A STATED LEVEL OF PERFORMANCE.

THE REPEATED IMPLICATION (OF YOUR MARCH 16 LETTER) IS THAT "DEVELOP" IS CONNECTED WITH THE CONCEPTION OF AN ENTIRELY NEW PRINCIPLE OR TECHNOLOGY, WHILE "DESIGN" REFERS TO HARDWARE IMPLEMENTATION OF A KNOWN TECHNOLOGY. IN THIS SENSE, THE DISTINCTION BECOMES ACADEMIC WHEN APPLIED TO THE PRESENT PROCUREMENT. ALL THE TECHNOLOGIES IN QUESTION ARE THEN "DEVELOPED." CAPTURE EFFECT (DUAL-FREQUENCY) LOCALIZER GENERATING AND RADIATING SYSTEMS HAVE BEEN OPERATING FOR MANY YEARS; USAF'S PRESENT AM/MAN-7 USES THIS PRINCIPLE. INTEGRAL MONITORING OF THE TYPE SPECIFIED IN THIS PROCUREMENT IS IN FACT BEING USED BY THOMSON CSF (FRANCE) AND BY STANDARD TELEPHONE AND CABLE'S SYDNEY, AUSTRALIA SUBSIDIARY. FAR-FIELD LOCALIZER MONITORS ARE IN OPERATION ON A TEST BASIS IN MANY INSTALLATIONS, AND ARE BEING PROCURED BY FAA ON A PRODUCTION BASIS. ***

ON THE PRESENT RECORD, WE MUST CONCLUDE THAT THE AIR FORCE NO LONGER MAINTAINS THAT A DEVELOPMENT EFFORT WOULD BE REQUIRED OF NEW PRODUCERS OF TWO-FREQUENCY LOCALIZER STATIONS. IT THUS APPEARS THAT THE INCLUSION OF THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE" MAY NOT BE JUSTIFIED AS BEING NECESSARY TO PREVENT THE AIR FORCE FROM ENTERING INTO A DEVELOPMENT CONTRACT PROHIBITED BY THE FEDERAL AVIATION ACT OF 1958.

HOWEVER, EVEN IF THE EFFORT REQUIRED IS CHARACTERIZED AS DESIGN ENGINEERING, RATHER THAN DEVELOPMENT, THERE REMAINS A SUBSTANTIAL DISAGREEMENT BETWEEN AIL AND THE AIR FORCE CONCERNING THE EXTENT OF THE EFFORT REQUIRED AND THE NECESSITY FOR THE DEMONSTRATION OF A DUAL FREQUENCY CAPTURE EFFECT ILS. YOU MAINTAIN THAT THERE IS NO REQUIREMENT FOR A UNIQUE OR NOVEL LOCALIZER ANTENNA DESIGN, AND YOU ADVISE THAT AIL IS CURRENTLY UNDER CONTRACT TO THE CANADIAN GOVERNMENT TO DESIGN AND DEMONSTRATE AN ILS WHICH APPARENTLY WILL MEET THE REQUIREMENTS OF THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE" OF LRTP 0166. ALTHOUGH THE CANADIAN SYSTEM WILL NOT BE COMPLETED WITHIN THE TIME PERMITTED BY THE INSTANT PROCUREMENT, AIL ASSERTS THAT ITS EXPERIENCE WITH THE CANADIAN CONTRACT WILL ENABLE IT TO PRODUCE A DESIGN WHICH WILL MEET THE REQUIREMENTS OF THE AIR FORCE.

THE AIR FORCE OBSERVES THAT ALTHOUGH THE VARIOUS FEATURES OF THIS EQUIPMENT HAVE BEEN DEVELOPED ON A PIECEMEAL BASIS, ALL THE FEATURES ARE NOT AVAILABLE FROM ONE SOURCE, AND THE MONITORING TECHNIQUES REQUIRED HAVE NOT BEEN PREVIOUSLY INTEGRATED AROUND ONE BASIC ILS SYSTEM. IN REGARD TO THE BASIC GENERATING AND RADIATING SYSTEM, THE AIR FORCE DETERMINED THAT DUE TO THE INTERACTION BETWEEN AN ILS AND ITS PHYSICAL ENVIRONMENT, THE ONLY WAY TO DETERMINE WHETHER A BIDDER HAD AN OPERABLE SYSTEM OF THE DUAL FREQUENCY TYPE DESIRED WAS TO REQUIRE THAT HE DEMONSTRATE SUCH A SYSTEM IN ACTUAL OPERATION. THE INSTANT PROCUREMENT ALSO REQUIRED MONITORS MORE RELIABLE AND SOPHISTICATED THAN THOSE AVAILABLE WITH ANY EXISTING COMMERCIAL ILS. SOME MINOR MODIFICATIONS WERE ALSO REQUIRED IN THE PERIPHERAL COMPONENTS SUCH AS SHELTERS AND AIR CONDITIONERS. THE REPORTED EXPERIENCE OF THE FAA INDICATES THAT EVEN IN THE CASE OF LESS SOPHISTICATED SYSTEMS DEFICIENCIES IN OPERATION, PARTICULARLY WITH RESPECT TO THE LOCALIZER SIGNAL, HAVE BEEN ENCOUNTERED WHICH COULD NOT HAVE BEEN DETERMINED IN ANY MANNER EXCEPT BY TESTING OF AN INSTALLED SYSTEM BY FLIGHT INSPECTION, AND WHICH REQUIRE SOME MEASURE OF DESIGN MODIFICATION. IN THE LIGHT OF THIS, AND OF THE FURTHER OPINION EXPRESSED BY THE CHIEF OF FAA'S APPROACH AND LANDING BRANCH, THAT THERE IS REASON TO BELIEVE THAT A TWO FREQUENCY LOCALIZER MAY PRESENT UNIQUE PROBLEMS, WE DO NOT FEEL THAT WE WOULD BE JUSTIFIED IN OBJECTING TO THE AIR FORCE'S CONCLUSION THAT PROPOSALS WOULD BE ACCEPTED ONLY FROM OFFERORS WHO HAD PRODUCED AND COULD DEMONSTRATE A SYSTEM INCLUDING A DUAL FREQUENCY CAPTURE EFFECT LOCALIZER.

IT IS THE LONG-ESTABLISHED POLICY OF OUR OFFICE TO ACCEPT AN AGENCY'S DETERMINATION OF ITS NEEDS, AND SUCH DETERMINATIONS WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF DEMONSTRATED FRAUD OR CLEARLY CAPRICIOUS ACTION. 17 COMP. GEN. 554 (1938). WHILE WE OBJECT TO THE USE OF SPECIFICATIONS WHICH WE CONSIDER TO BE UNDULY RESTRICTIVE OF COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. COMP. GEN. 586 (1954); 30 COMP. GEN. 368 (1951).

FOR THE REASONS STATED, YOUR PROTEST IS DENIED INSOFAR AS IT IS BASED UPON THE INCLUSION OF THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE" IN LRTP -0166.

THE PROCUREMENT POLICY AND MANAGEMENT DIVISION, AERONAUTICAL SYSTEMS DIVISION, IN APPROVING THE USE OF THE QUALIFICATION CLAUSE, REFERRED TO THE PROCUREMENT AS ONE FOR "AN OFF-THE-SHELF COMMERCIAL ILS SYSTEM." YOU CONTEND THAT IF THIS STATEMENT IS ACCURATE IT WAS IMPROPER TO HAVE USED TWO-STEP FORMAL ADVERTISING, BECAUSE THE SPECIFICATIONS FOR AN "OFF-THE- SHELF" ITEM WOULD BE SUFFICIENTLY DEFINITE TO PERMIT FULL, AND FREE COMPETITION WITHOUT TECHNICAL EVALUATION. THUS, THE REQUIREMENTS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-502(A)(1) FOR TWO STEP FORMAL ADVERTISING WERE NOT MET AND CONVENTIONAL FORMAL ADVERTISING SHOULD HAVE BEEN USED.

IT IS THE ADMINISTRATIVE POSITION THAT TWO-STEP FORMAL ADVERTISING WAS USED BECAUSE THE PROCUREMENT CONTEMPLATED VARIOUS POSSIBLE COMBINATIONS OF COMPONENTS INTO VARIOUS POSSIBLE SYSTEM CONFIGURATIONS RESULTING IN DIFFERING OPERATION AND PERFORMANCE WHICH HAD NOT BEEN DEMONSTRATED BY ANY FIRM AT THE TIME THE SOLICITATION WAS ISSUED. IT APPEARS THAT THE SYSTEMS BEING PROCURED WILL UTILIZE COMMERCIALLY AVAILABLE COMPONENTS WHICH ARE CAPABLE OF BEING MODIFIED TO MEET AIR FORCE REQUIREMENTS, BUT THE PRECISE SYSTEMS BEING PROCURED ARE NOT COMMERCIALLY AVAILABLE AS "OFF-THE-SHELF" ITEMS. THIS IS PARTICULARLY TRUE WITH RESPECT TO THE LOCALIZER MONITORING SYSTEM, WHICH HAS NEVER BEEN INCORPORATED INTO AN OPERATING INSTALLATION IN THE FORM SPECIFIED BY THE AIR FORCE. IT WAS THE JUDGMENT OF THE AIR FORCE THAT THE DELAY IN DELIVERY FROM LESS EXPERIENCED SOURCES FABRICATING A NEW DESIGN UNDER CONVENTIONAL FORMAL ADVERTISING MIGHT EXCEED THE ADDITIONAL TIME REQUIRED FOR THE TWO-STEP METHOD. IT IS TRUE, AS YOU POINT OUT, THAT THE SECOND STEP INVITATION FOR BIDS WAS ISSUED ON MAY 1, 1970, INSTEAD OF LATE FEBRUARY 1970 AS ORIGINALLY PLANNED. IT SHOULD BE BORNE IN MIND, HOWEVER, THAT THE ISSUANCE OF THE SECOND STEP INVITATION, AS WELL AS THE OPENING OF BIDS THEREUNDER, WAS DELAYED PENDING POSSIBLE RESOLUTION BY OUR OFFICE OF YOUR PROTEST. THE AIR FORCE ALSO CHOSE A METHOD OF FORMAL ADVERTISING INSTEAD OF NEGOTIATION IN VIEW OF THE REQUIREMENT OF 10 U.S.C. 2304(A) THAT FORMAL ADVERTISING BE USED "IN ALL CASES IN WHICH THE USE OF SUCH METHOD IS FASIBLE AND PRACTICABLE UNDER EXISTING CONDITIONS AND CIRCUMSTANCES." WHILE YOU AGREE WITH THIS PRINCIPLE, YOU REASSERT THAT THE MAXIMUM COMPETITION CONTEMPLATED BY TWO- STEP FORMAL ADVERTISING WAS NOT OBTAINED IN THIS PROCUREMENT. IN THIS REGARD, WE HAVE CONCLUDED THAT THE REQUIRED BIDDER QUALIFICATIONS CANNOT BE CONSIDERED TO BE ARBITRARY OR UNREASONABLE, AND COMPETITION THEREFORE WAS NOT UNDULY RESTRICTED. IN VIEW OF THE ABOVE, WE FIND NO LEGAL BASIS FOR OBJECTING TO THE USE OF TWO-STEP FORMAL ADVERTISING IN THIS PROCUREMENT.

FINALLY, YOU MAINTAIN THAT THE AIR FORCE ERRED IN PROCURING THE ILS EQUIPMENT ON A MULTI-YEAR BASIS. YOUR LETTER OF MAY 15, 1970, STATES:

*** AIL HAS JUST LEARNED UPON ISSUANCE OF THE IFB MAY 1, 1970, THAT THE PRESENT PROCUREMENT IS A 3-YEAR MULTI-YEAR PROCUREMENT. WHILE THE IMPLICATION OF THIS STATEMENT IS THAT THE MULTI-YEAR NATURE OF THE PROCUREMENT WAS NOT DISCLOSED TO PROSPECTIVE CONTRACTORS UNTIL THE SECOND STEP INVITATION WAS ISSUED, LRTP-0166, WHICH WAS ISSUED ON OCTOBER 9, 1969, PROVIDES IN PARAGRAPH 4 THEREOF:

IT IS CONTEMPLATED THAT THE PROPOSED PROCUREMENT WILL BE A MULTI-YEAR (FY -70-71-72) PROCUREMENT PURSUANT TO ASPR 1-322. THIS PROVISION, WHICH IMMEDIATELY FOLLOWS THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE," (THE PRINCIPAL OBJECT OF YOUR PROTEST) APPEARS IN THE COPY OF THE LETTER REQUEST WHICH WAS AMONG THE ENCLOSURES TO AIL'S INITIAL LETTER TO OUR OFFICE DATED DECEMBER 10, 1969. SINCE THE FIRST STEP SOLICITATION CLEARLY INFORMED BIDDERS OF THE MULTI-YEAR CHARACTER OF THE PROCUREMENT, WE BELIEVE THAT IT WOULD HAVE BEEN APPROPRIATE FOR ANY OBJECTIONS THERETO TO HAVE BEEN STATED MORE PROMPTLY.

YOU CONTEND THAT AS A RESULT OF ITS CANADIAN CONTRACT, AIL ANTICIPATES BEING ABLE TO MEET THE CRITERIA OF THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE," AND THUS TO BE ELIGIBLE TO BID ON THE AIR FORCE REQUIREMENTS FOR FISCAL YEARS 1971 AND 1972, IF THEY WERE TO BE OPEN TO COMPETITIVE PROCUREMENT. THEREFORE, YOU REQUEST THAT IF OUR OFFICE DETERMINES THE QUALIFICATION CLAUSE IS NOT OBJECTIONABLE, THAT WE DIRECT CANCELLATION OF THE SECOND STEP INVITATION AND REQUIRE THE ISSUANCE OF AN INVITATION LIMITED TO THE FIRST YEAR'S REQUIREMENTS.

THERE IS NO INDICATION THAT YOUR ASSERTION THAT AIL WILL MEET THE REQUIREMENTS OF THE QUALIFICATIONS CLAUSE IN TIME FOR A FISCAL YEAR 1971 PROCUREMENT IS MADE IN ANYTHING BUT GOOD FAITH. HOWEVER, SUCH QUALIFICATION IS NOT ASSURED, AND WE DO NOT BELIEVE THAT WE WOULD BE WARRANTED IN DISTURBING THE INSTANT PROCUREMENT ON THE BASIS THAT ON AN UNSPECIFIED FUTURE DATE, AIL MAY BE IN A POSITION TO COMPETE. CF. 40 COMP. GEN. 35, 38 (1960); 36 COMP. GEN. 809, 813 (1957).

YOU HAVE ALSO MADE THE FOLLOWING ARGUMENT:

*** , IT IS POINTED OUT THAT IN A SIMILAR FACTUAL SITUATION TO THE PRESENT ONE, THE COMPTROLLER GENERAL, IN COMPTROLLER GENERAL'S DECISION B- 167386 (UNPUBLISHED), EXPRESSED THE VIEW THAT DESPITE THE URGENCY OF THE NEED FOR AN IIS SYSTEM, A MULTI-YEAR PROCUREMENT CONTRACT SHOULD BE CANCELLED UPON EVIDENCE SHOWING THAT NEGOTIATIONS WITH A BIDDER AFTER DUE DATE FOR THE REQUEST FOR PROPOSALS RESULTED IN A MULTI-YEAR PROCUREMENT CONTRACT, AND THAT NEGOTIATIONS SHOULD HAVE BEEN OPENED UP TO OTHER BIDDERS. SUCH PROCEDURAL ERROR JUSTIFIED CANCELLATION OF THE MULTI-YEAR PROCUREMENT CONTRACT. BY ANALOGY, AND ALTHOUGH NO CONTRACT HAS BEEN AWARDED HERE, AIL ASSERTS THAT THE INCONSISTENCY BETWEEN THE AIR FORCE ARGUMENTS OF URGENT DELIVERY REQUIREMENTS IN ATTEMPTS TO JUSTIFY THE TECHNICAL QUALIFICATION CLAUSE, WHILE AT THE SAME TIME PROMULGATING MULTI- YEAR PROCUREMENTS OF THE ILS SYSTEM IS SO PATENT AS TO REQUIRE CANCELLATION OF THE MULTI-YEAR METHOD OF PROCUREMENT IN THIS INSTANCE UNLESS THE RESTRICTIVE TECHNICAL QUALIFICATION CLAUSE REQUIREMENT IS REMOVED TO PERMIT OTHERWISE QUALIFIED BIDDERS TO BID ON SUCH PROCUREMENT. YOUR DISCUSSION IMPLIES THAT IN OUR DECISION OF DECEMBER 22, 1969, 49 COMP. GEN. 402, OUR OFFICE DIRECTED CANCELLATION OF A MULTI-YEAR CONTRACT WHICH RESULTED FROM IMPROPER PROCUREMENT PROCEDURES. OUR CONCLUSION IN THAT DECISION, HOWEVER, WAS AS FOLLOWS:

WE ARE NOT UNMINDFUL OF THE URGENCY OF THE NEED FOR THE SYSTEMS NOW UNDER CONTRACT WITH AIL. NOR CAN WE IGNORE THE POSSIBLE FINANCIAL CONSEQUENCES OF A CANCELLATION OF THE AIL CONTRACT. BUT FOR THESE CONSIDERATIONS IT IS OUR VIEW THAT THE CONTRACT WITH AIL SHOULD BE CANCELLED, AND FURTHER NEGOTIATIONS CONDUCTED WITH BOTH WILCOX AND AIL. WE BELIEVE AN EFFORT SHOULD BE MADE BY YOUR AGENCY, UNDER YOUR AUTHORITY TO NEGOTIATE THIS PROCUREMENT, TO RECTIFY THE PROCEDURAL ERRORS MADE, AND TO REACH SOME AGREEMENT BETWEEN YOURSELVES. AIL, AND WILCOX WHICH WILL BEST SERVE THE INTERESTS OF THE GOVERNMENT IN SECURING THE MOST EXPEDITIOUS AND ECONOMICAL DELIVERY OF THE SYSTEMS NEEDED.

IF SUCH AGREEMENT CANNOT BE REACHED, WE REQUEST THAT YOU FURNISH US AN ESTIMATE OF COSTS CHARGEABLE TO THE GOVERNMENT IN THE EVENT OF CANCELLATION OF THE AIL CONTRACT BOTH IN WHOLE AND AS TO THE 46 UNITS COVERED BY THE SECOND YEAR OF THE CONTRACT.

THE CONTRACT INVOLVED IN OUR DECISION 49 COMP. GEN. 402 WAS NOT CANCELED "DESPITE" THE URGENT NEED FOR THE SYSTEMS. RATHER, THE URGENCY OF THE NEED FOR THE EQUIPMENT WEIGHED AGAINST CANCELLATION. THIS CONTRACT, WHICH IS HELD BY YOUR CLIENT AIL, HAS NOT BEEN CANCELED, ALTHOUGH OUR LATEST INFORMATION IS THAT THE AGREEMENT SUGGESTED BY OUR DECISION OF DECEMBER 22, 1969, HAS NOT AS YET BEEN REACHED.

MOREOVER, MULTI-YEAR PROCUREMENT MAY NOT NECESSARILY BE INAPPROPRIATE FOR URGENTLY NEEDED ITEMS. PARAGRAPH 2 OF LRTP-0166 STATED IN REGARD TO THE GOVERNMENT'S PROBABLE DELIVERY REQUIREMENTS:

DELIVERIES WILL BEGIN 330 DAYS AFTER AWARD AT THE RATE OF 4 EACH PER MONTH AND CONTINUE AT THAT RATE UNTIL DELIVERIES ARE COMPLETE. THUS, IT WAS ANTICIPATED THAT EVEN THOSE FIRMS WHICH MET THE "BIDDERS TECHNICAL QUALIFICATION CLAUSE" WOULD NOT COMMENCE DELIVERY UNTIL APPROXIMATELY 11 MONTHS AFTER AWARD. IT LOGICALLY FOLLOWS THAT SIMILAR DELAYS IN DELIVERY WOULD OCCUR WITH NEW CONTRACTORS, SUCH AS AIL, UNDER FUTURE 1-YEAR CONTRACTS. THEREFORE, THE MULTI-YEAR TECHNIQUE APPEARS TO OFFER MORE TIMELY DELIVERY THAN SEPARATE SINGLE-YEAR CONTRACTS. IN LIGHT OF THESE CONSIDERATIONS, WE DO NOT FIND THE USE OF MULTI-YEAR PROCUREMENT IMPROPER.

ACCORDINGLY, YOUR PROTEST IS DENIED.