B-160484, JAN. 30, 1967

B-160484, JAN. 30, 1967

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO JOSLYN ELECTRONIC SYSTEMS, WHICH PROTESTED AGAINST AWARD OF A CONTRACT TO DALE ELECTRONICS, INCORPORATED, PURSUANT TO REQUEST FOR PROPOSALS (RFP) DSA 9-66-6462 FOR LIGHTNING ARRESTERS. THIS MATTER WAS THE SUBJECT OF REPORTS FROM THE OFFICE OF COUNSEL, DATED DECEMBER 20 AND 29, 1966, AND THE "LIST OF ENCLOSURES" INCLUDED WITH THE DECEMBER 20 REPORT, AND THE ENCLOSURES TO THE DECEMBER 29 REPORT, ARE RETURNED HEREWITH.

WE HAVE INFORMALLY SUGGESTED TO PERSONNEL IN THE OFFICE OF COUNSEL THAT UNDER THE ACTIVITY'S INTERPRETATION OF DALE'S OFFERS ON INCREMENTAL QUANTITIES, THE ACTIVITY COULD HAVE PURCHASED NINE ADDITIONAL UNITS FOR $54.00 LESS THAN THE ORIGINAL CONTRACT PRICE, AND THAT THE RFP COULD BE CHALLENGED AS BEING AMBIGUOUS WITH RESPECT TO THE MANNER IN WHICH PRICES WERE REQUESTED ON INCREMENTAL QUANTITIES. WE WERE SUBSEQUENTLY ADVISED THAT THE INTERPRETATION OF DALE'S OFFER IS SUPPORTED BY PAST DEALINGS WITH THAT FIRM; THAT DALE HAS AGREED TO AN AMENDMENT OF THE CONTRACT SO THAT IT WILL CONFORM WITH DALE'S MORE ADVANTAGEOUS OFFER (ALTHOUGH A LONGER DELIVERY PERIOD MAY NOW BE REQUIRED FOR THE NINE ADDITIONAL UNITS); AND THAT THE LANGUAGE INVOLVING INCREMENTAL QUANTITIES WILL BE CLARIFIED FOR FUTURE PROCUREMENTS. WE SUGGEST THAT PROCEDURAL SAFEGUARDS BE INITIATED SO THAT IN FUTURE PROCUREMENTS INVOLVING THE EVALUATION OF INCREMENTAL BIDS, THE PROCURING ACTIVITY WILL GIVE MORE ADEQUATE CONSIDERATION TO THE ECONOMICS OFFERED BY EACH OF THE VARIOUS INCREMENTS IN EACH BID.

WE ALSO NOTE THAT THE "REPLACEMENT SPARES" CLAUSE OF THE RFP, "DESC FORM P-71-111 (JULY 1963)," CONTAINS LANGUAGE INSTRUCTING OFFERORS HOW TO PROCEED IF THEY CHOSE TO OFFER ALTERNATE UNITS INSTEAD OF THE SPECIFIED BRAND NAME ITEM. TO THIS END THE FORM DESCRIBES THREE TYPES OF ALTERNATE OFFERS WHICH WILL BE CONSIDERED FOR AWARD, AND PROVIDES THAT "FOR EVALUATION PURPOSES BIDDERS MUST INDICATE, BY MARKING THE APPROPRIATE BLOCK/S), WHICH OF THE FOLLOWING(THREE) SITUATIONS IS APPLICABLE.'

IT IS OUR OPINION THAT THESE PROVISIONS MAY DISCOURAGE RESPONSIBLE FIRMS FROM SUBMITTING OFFERS OF THE TYPE ACCEPTED FROM DALE IN THIS PROCUREMENT. IN THIS CONNECTION, DALE OFFERED TO SUPPLY AN ITEM IT BELIEVED WOULD BE FUNCTIONALLY, PHYSICALLY, MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH THE SPECIFIED BRAND NAME, AND WOULD MEET OR EXCEED THE SPECIFICATIONS FOR THE BRAND NAME ITEM. IN ADDITION, DALE SUBMITTED TEST RESULTS SHOWING THAT THE ITEM IT OFFERED TO SUPPLY HAD RECEIVED PREVIOUS APPROVAL UNDER AN AIR FORCE CONTRACT. HOWEVER, ITS OFFER DID NOT CONFORM TO ANY OF THE THREE ALTERNATE TYPES DESCRIBED ON DESC FORM P-71- 111. WE SUGGEST THAT, IN FUTURE PROCUREMENTS WHERE, AS IN THE INSTANT CASE" ACTUAL NEEDS MAY BE SATISFIED BY ALTERNATE OFFERS OTHER THAN THOSE SPECIFICALLY ENUMERATED IN DESC FORM P-71-111, THE FORM EITHER SHOULD NOT BE USED OR SHOULD BE APPROPRIATELY AMENDED.