B-153404, JULY 23, 1964, 44 COMP. GEN. 27

B-153404, JULY 23, 1964, 44 COMP. GEN. 27

CONTRACTS - SPECIFICATIONS - FEDERAL SPECIFICATIONS - DEVIATION JUSTIFICATION. CONTRACTS - AWARDS - TO OTHER THAN LOWEST BIDDER - OTHER FACTORS CONSIDERED. CONTRACTS - DATA, RIGHTS, ETC. - PRICE REASONABLENESS THE AWARD OF A CONTRACT TO OTHER THAN THE LOW BIDDER UNDER AN INVITATION FOR EQUIPMENT FEATURING A PROPRIETARY ITEM MANUFACTURED ONLY BY THE SUCCESSFUL BIDDER, WHERE THE LOW BIDDER PREVIOUSLY HAD MET BOTH THE FEDERAL AND MILITARY SPECIFICATIONS ESTABLISHED FOR THE EQUIPMENT WITHOUT THE PROPRIETARY FEATURE WILL NOT BE DISTURBED, THE PROPRIETARY FEATURE REPRESENTING A TECHNICAL ADVANCE IN THE MANUFACTURING OF THE EQUIPMENT AND MEETING THE BONA FIDE NEEDS OF THE DEPARTMENT OF THE NAVY JUSTIFY THE NONUSE OF THE EXISTING FEDERAL SPECIFICATIONS THAT DO NOT ADEQUATELY MEET THE GOVERNMENT'S MINIMUM NEEDS; HOWEVER, IN VIEW OF THE RESTRICTIVE FEATURE OF THE PROCUREMENT, THE PROCEDURES FOR OBTAINING DEVIATIONS FROM STANDARD SPECIFICATIONS PROVIDED BY PARAGRAPH 1-1202 OF THE ARMED SERVICES PROCUREMENT REGULATION SHOULD BE REVIEWED AND STRENGTHENED. THE FACT THAT AN AWARD TO THE ONLY FIRM THAT COULD SUPPLY THE LEGITIMATE NEEDS OF THE PROCURING AGENCY WAS NOT THE LOW BIDDER DOES NOT VIOLATE THE COMPETITIVE BIDDING STATUTES, EVEN THOUGH OTHER BIDDERS COULD NOT SUBMIT RESPONSIVE BIDS WITHOUT CHANGING THEIR EQUIPMENT TO INCORPORATE THE PROPRIETARY FEATURE OF THE SUCCESSFUL BIDDER, THERE BEING NO REQUIREMENT TO PURCHASE EQUIPMENT WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED, THE SPECIAL NEEDS OF THE AGENCY PRECLUDED PURCHASING A NONCONFORMING ITEM OFFERED AT A LOWER PRICE, AND NEITHER DO THE PROCUREMENT REGULATIONS REQUIRE THE USE OF INADEQUATE FEDERAL AND MILITARY SPECIFICATIONS, PARAGRAPH 1-1202 (C) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDING FOR DEVIATIONS FROM THE MANDATORY USE OF FEDERAL SPECIFICATIONS, AND PARAGRAPH 1-1202 (D) FOR THEIR REVISION TO OBVIATE REPEATED DEPARTURES FROM THE SPECIFICATIONS. THE QUESTION OF WHETHER A BIDDER IS AT ANY POINT IN TIME A SOLE SOURCE OF A GIVEN ITEM THEREBY ELIMINATING FEAR OF PRICE COMPETITION IS DIFFICULT TO RESOLVE IN VIEW OF THE FACT THAT ANOTHER BIDDER MAY HAVE PRIVATE INTENTIONS TO ENTER THE MARKET AT THE FIRST OPPORTUNITY OR BE WILLING TO ALTER EQUIPMENT IN ORDER TO COMPETE, BUT THE CONTRACTING AGENCY HAVING THE PRIMARY RESPONSIBILITY TO DETERMINE WHETHER OR NOT A BID PRICE IS REASONABLE SHOULD WHEN PROCURING ITEMS KNOWN TO BE PROPRIETARY UTILIZE A METHOD OF PROCUREMENT WHICH ENABLES THE GOVERNMENT TO ASSURE ITSELF OF THE REASONABLENESS OF THE PRICE.

TO THE CHAMPION MACHINERY COMPANY, JULY 23, 1964:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 29, 1964, AND ENCLOSURES, PROTESTING AGAINST THE REJECTION OF YOUR LOW BID AND THE AWARD MADE DECEMBER 17, 1963, TO HOBART MANUFACTURING COMPANY UNDER INVITATION FOR BIDS NO. 111-91-64 ISSUED OCTOBER 22, 1963, BY 111 SUPPLY DEPARTMENT, BOSTON NAVAL SHIPYARD, BOSTON, MASSACHUSETTS, CONTRACT NO. N111-77723. PRIOR PROTEST AGAINST THE AWARD WAS MADE TO THE BOSTON NAVAL SHIPYARD BY YOUR LETTERS DATED DECEMBER 23, 1963, AND JANUARY 15, 1964. WE ALSO HAVE YOUR LETTER OF MAY 4, 1964, WITH ENCLOSURES, WITH REFERENCE TO IFB NO. 204 -62-64, ISSUED BY THE NAVAL AIR STATION AT PENSACOLA, FLORIDA.

THE INVITATION ASKED FOR BIDS ON FURNISHING A FLOOR-TYPE 80 QUART FOOD MIXING MACHINE HAVING GENERAL DIMENSIONS OF 27 1/4 INCHES WIDE BY 42 5/8 INCHES DEEP (FRONT TO BACK) BY 79 1/8 INCHES HIGH, AND SPECIFIED THAT "EACH UNIT SHALL BE MODEL M-802, TALL COLUMN, AS MANUFACTURED BY THE HOBART MANUFACTURING CO., WITH THE ACCESSORIES NOTED ABOVE, OR EQUAL.' FOURTEEN DEALERS AND MANUFACTURERS WERE SOLICITED RESULTING IN RECEIPT OF THE FOLLOWING FIVE BIDS:

CHART

DISCOUNT PRICE HOBART MANUFACTURING COMPANY NET/30 $2,978.75CHAMPION MACHINERY COMPANY 1 PERCENT (10D

2,534.50 TRIUMPH MANUFACTURING COMPANY 1 PERCENT (20D 3,095.00 ANCHOR EQUIPMENT 1/8 OF 1 PERCENT (20D 2,740.00 CASSON CORPORATION

NET/30 3,000.00

THE DEPARTMENT OF THE NAVY REPORTS THAT A PRELIMINARY ANALYSIS OF THE BIDS INDICATED THAT ALL BUT THE HOBART MANUFACTURING COMPANY AND CASSON CORPORATION, A DEALER FOR HOBART, WERE BIDDING ON A FOOD MIXING MACHINE WHICH DID NOT HAVE THE TALL-COLUMN FEATURE, BUT IN VIEW OF THE LOWER BIDS RECEIVED FROM YOUR COMPANY AND ANCHOR EQUIPMENT COMPANY, THE REQUISITIONING ACTIVITY, U.S. NAVAL AIR STATION, SOUTH WEYMOUTH, MASSACHUSETTS, WAS REQUESTED TO VIEW ALL BIDS AND ASCERTAIN WHETHER THE MACHINES OF THE LOWER BIDDERS WERE, IN FACT, UNACCEPTABLE AND DID NOT MEET THE BONA FIDE NEEDS OF THAT INSTALLATION. IN REPLY, THE NAVAL AIR STATION REQUESTED REJECTION OF THE TWO LOWER BIDS FOR THE PRINCIPAL REASON THAT THE MACHINES BID THEREON, CHAMPION MODEL S-80B AND TRIUMPH MODEL K1-80, ARE STANDARD HEIGHT MODELS WHICH ARE APPROXIMATELY 14 INCHES SHORTER THAN THE TALL-COLUMN DESIGN AND DO NOT PERMIT REMOVAL OF MIXING BOWLS WITHOUT REMOVING THE MIXING AGITATOR AS DOES THE HOBART TALL-COLUMN MODEL. IT WAS ALSO POINTED OUT THAT THE HOBART MANUFACTURING COMPANY BID ON THEIR TALL- COLUMN MODEL AND NOT THEIR SMALLER STANDARD HEIGHT MODEL WHICH PRESUMABLY SELLS AT A LESSER PRICE. THE PROCUREMENT WAS THEN CONSIDERED BY THE CONTRACT REVIEW BOARD WHICH DETERMINED THAT AWARD SHOULD BE MADE TO THE HOBART MANUFACTURING COMPANY AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

IN YOUR LETTER OF JANUARY 29, YOU CONTEND THERE ARE FEDERAL AND MILITARY SPECIFICATIONS FOR FOOD MIXERS WHICH YOU HAVE PREVIOUSLY SUPPLIED THE NAVY ON COMPETITIVE BIDS FOR USE BOTH ABOARD SHIPS AND AT SHORE INSTALLATIONS, AND YOUR PRIMARY CONCERN IN THE MATTER APPEARS TO BE ESSENTIALLY AS FOLLOWS:

UNDER ORDINARY CIRCUMSTANCES, AND IN SPITE OF THE FACT THAT THE BOSTON NAVAL SHIPYARD PAID $453.25 (SOME 10 PERCENT) MORE TO OUR COMPETITOR THAN THEY WOULD HAVE PAID TO US, WE WOULD NOT HAVE PROTESTED THIS MATTER. HOWEVER, WE NOW HAVE TWO MORE INVITATIONS FROM TWO OTHER NAVAL SUPPLY CENTERS IN WHICH THE SAME RESTRICTIVE PROPRIETARY SPECIFICATION OCCURS. WE, THEREFORE, FEEL A DEFINITE PATTERN IS NOW EMERGING WHEREBY WE, BECAUSE OF THE PROPRIETARY RESTRICTIVE FEATURES OF THE HOBART M-802 TALL COLUMN 80 QT. MIXER, ARE ELIMINATED FROM BIDDING. IN EFFECT, ALL OTHER COMPETITIVE MIXERS ARE ALSO ELIMINATED, IF OTHER OFFICES SHOULD FEEL THE ADDITIONAL HEIGHT OF THE HOBART M-802 TALL COLUMN IS THE DECIDING FACTOR.

ARMED SERVICE PROCUREMENT REGULATION 1-1202 (A) LAYS DOWN THE BASIC REQUIREMENT THAT FEDERAL SPECIFICATIONS, UNLESS DETERMINED BY THE DEPARTMENT OF DEFENSE TO BE INAPPLICABLE FOR ITS USE, ARE MANDATORY FOR USE IN PROCUREMENT OF SUPPLIES COVERED THEREBY. PARAGRAPH 1-1202 (B) LISTS SEVEN EXCEPTIONS TO THAT REQUIREMENT, NONE OF WHICH APPEAR TO BE APPLICABLE TO THIS PROCUREMENT. PARAGRAPH 1-1202 (C) PROVIDES THAT WHERE A FEDERAL SPECIFICATION DOES NOT MEET THE ESSENTIAL NEEDS OF A COMMAND, ACTION MAY BE TAKEN IN ACCORDANCE WITH PROCEDURES ESTABLISHED UNDER THE DEFENSE STANDARDIZATION PROGRAM. FINALLY PARAGRAPH 1-1202 (D) STATES THAT WHENEVER A SPECIFICATION IS FOUND TO BE INADEQUATE, IMMEDIATE ACTION SHALL BE TAKEN TO EFFECT THE ISSUANCE OF AN AMENDMENT OR A REVISION IN ACCORDANCE WITH ESTABLISHED PROCEDURES TO OBVIATE THE NECESSITY FOR REPEATED DEPARTURES FROM THE SPECIFICATION. DEPARTMENT OF DEFENSE DIRECTIVE 4120.3, DATED OCTOBER 15, 1954, AND TITLED DEFENSE STANDARDIZATION PROGRAM, PROVIDES IN PARAGRAPH VIIB1 THAT FEDERAL SPECIFICATIONS SHALL BE IMPLEMENTED IN ACCORDANCE WITH APPROVED FEDERAL AND DEPARTMENT OF DEFENSE REGULATIONS AND PROCEDURES.

WHILE IMPLEMENTING PROCEDURES CONTAINED IN PARAGRAPH 22056-8, BUREAU OF SUPPLIES AND ACCOUNTS MANUAL, REQUIRE THE USE OF FEDERAL AND MILITARY SPECIFICATIONS WHEN APPLICABLE, PROVISION IS ALSO MADE THEREIN FOR THE PREPARATION OF DEVIATING PURCHASE REQUISITIONS WHEN IT IS DETERMINED THAT REQUIRED ARTICLES DO NOT FULLY CONFORM TO EXISTING SPECIFICATIONS, AND (AS IN PARAGRAPH 1-1202 (D), ASPR, ABOVE) IT IS STATED "WHEN A SPECIFICATION IS FOUND TO BE INADEQUATE, ACTION WILL BE TAKEN IN ACCORDANCE WITH ESTABLISHED PROCEDURES TO HAVE SUCH SPECIFICATION AMENDED OR REVISED IN ORDER TO OBVIATE THE NECESSITY OF GRANTING REPEATED DEVIATIONS THEREFROM.' THUS, IT SEEMS CLEAR THAT IN ORDER TO OBTAIN THE GOVERNMENT'S MINIMUM NEEDS IN A PARTICULAR CASE BOTH THE ARMED SERVICES PROCUREMENT REGULATIONS AND IMPLEMENTING PROCEDURES CONTEMPLATE THE GRANTING OF DEVIATIONS FROM FEDERAL SPECIFICATIONS AND FOR THE PREPARATION OF SPECIFICATIONS TO INCLUDE NEW AND ADDITIONAL REQUIREMENTS. ACCORDINGLY, THERE REMAINS FOR CONSIDERATION WHETHER THE USE OF SUCH AUTHORITY WAS JUSTIFIED IN THE INSTANT CASE.

YOUR POSITION REGARDING THE INVITATION AND AWARD ON THE TALL-COLUMN MIXER WAS SIMILARLY STATED IN YOUR EARLIER COMMUNICATIONS ADDRESSED TO THE BOSTON NAVAL SHIPYARD, AND SINCE THE ORIGINAL SPECIFICATIONS FOR THE PROCUREMENT WERE PREPARED BY THE U.S. NAVAL SUPPLY RESEARCH AND DEVELOPMENT FACILITY, NAVAL SUPPLY CENTER, BAYONNE, NEW JERSEY, THAT ACTIVITY WAS REQUESTED TO FURNISH A COMPLETE REPORT IN THE MATTER. THEIR REPORT, DATED FEBRUARY 13, 1964, IS AS FOLLOWS:

REF: (A) BOSTON NAVSHIPYD LTR 530 IFB 111-91-64 N111-77723 OF 23 JAN 1964

(B) BUSANDA MANUAL, VOLUME II

1. THE FOLLOWING COMMENTS ARE OFFERED IN RESPONSE TO YOUR REQUEST OF REFERENCE (A):

A. RESTRICTIVENESS OF REQUIREMENT: THIS FACILITY COULD NOT FURNISH AT THE TIME OF THE REQUEST FROM NAS SOUTH WEYMOUTH, FULL JUSTIFICATION FOR SOLE SOURCE PROCUREMENT AS REQUIRED IN REFERENCE (B). SPECIFICALLY, THIS FACILITY COULD NOT SUPPLY THE "REASON THE SELECTED SOURCE CAN FURNISH THE REQUIREMENTS TO THE EXCLUSION OF OTHER SOURCES," AS IS REQUIRED IN PARA. 220568D (3) (B) OF REFERENCE (B). IT MUST BE NOTED THAT THE FOOD SERVICE FIELD IS IN A CONSTANT STATE OF FLUX, SO MUCH SO, THAT NORMALLY A DESIRABLE, NON-PATENTED FEATURE, I.E., TALL-COLUMN, WOULD BE INCORPORATED INTO ITEMS BY A NUMBER OF MANUFACTURERS SOON AFTER IT IS KNOWN TO THE TRADE IN FACT, THE APPROACH TAKEN BY THIS FACILITY IN NOT ATTEMPTING TO RECOMMEND THE ITEM AS PROPRIETARY, REVEALS AN ATTEMPT TO FOSTER COMPETITION RATHER THAN "A CLEVER SALES DEVICE" ALLEGED BY CHAMPION MACHINERY COMPANY. IT IS ONLY THROUGH THE EXPERIENCE OF YOUR IFB AND A SIMILAR ONE ISSUED BY NAVPURONY, THAT IT HAS BEEN DETERMINED THAT THE HOBART TALL-COLUMN MIXER IS INDEED A PROPRIETARY ITEM. IN EFFECT, THIS HAS BEEN REVEALED BY A FAIR TEST OF THE MARKET. IN LIGHT OF THESE DEVELOPMENTS IT IS THE OPINION OF THIS FACILITY THAT FUTURE PROCUREMENTS SHOULD BE MADE ON A SOLE SOURCE BASIS, WITH THE COMPLETE JUSTIFICATION REQUIRED BY REFERENCE (B), UNTIL SUCH TIME AS COMPETITION BECOMES EVIDENT.

B. ADVANTAGES OF THE "TALL-COLUMN" MIXER FEATURE:

(1) MIXER ATTACHMENTS (BEATER, WHIP, DOUGH HOOK, ETC.) DO NOT HAVE TO BE DETACHED AFTER EACH MIXING OPERATION AND LAID DOWN IN DUBIOUS AND POSSIBLY UNSANITARY LOCATIONS WHEN THE BOWL IS REMOVED. THIS IS IMPORTANT UNDER CONTINUOUS, BATCH MIXING OPERATIONS IN REDUCING BOWL CHANGING TIME AND ELIMINATING ONE ATTACHMENT CLEAN-UP STEP. MIXER CAPACITIES (REQUIREMENTS) FOR NAVY USE ARE BASED ON FROM TWO (2) TO FOUR (4) BATCHES OF SUCH ITEMS AS YEAST DOUGHS AND MASHED POTATOES. ADDITIONAL BOWLS HAVE ALREADY BEEN PROVIDED TO REDUCE WAITING TIME AND IT IS CONSIDERED THAT ANY ADDITIONAL IMPROVEMENTS THAT RESULT IN FURTHER TIME REDUCTIONS ARE IMPORTANT. INDIVIDUALLY, THEY MAY NOT APPEAR TO BE SIGNIFICANT; HOWEVER, COLLECTIVELY, THESE EFFICIENCIES CONTRIBUTE MATERIALLY TO A REDUCTION IN MAN-HOURS AND RELATED STAFFING REQUIREMENTS FOR GENERAL MESS OPERATIONS. THIS IS COMMENSURATE WITH THE NAVY'S CONTINUING AND CONCENTRATED COST REDUCTION PROGRAM IN ALL OPERATIONAL AREAS.

(2) THIS FEATURE ALSO LOCATES THE MIXER BOWL AT A FAR MORE DESIRABLE WORKING HEIGHT OF APPROXIMATELY 44 INCHES AS COMPARED TO A PRESENT AWKWARD HEIGHT OF APPROXIMATELY 30 INCHES. SCRAPING DOWN THE SIDES OF THE BOWL DURING MIXING OPERATIONS, FOR EXAMPLE, NOW REQUIRES CONSTANT STOOPING ON THE PART OF THE OPERATOR.

2. IT IS THE OPINION OF THIS FACILITY THAT THE ELIMINATION OF THE "TALL- COLUMN" MIXER FEATURE WOULD BE A BACKWARD STEP IN THE CONSTANT EFFORT TO PROVIDE IMPROVED GALLEY EQUIPMENT FOR NAVY USE. THE ADDITIONAL COST IS CONSIDERED TO BE WELL JUSTIFIED WHEN CONSIDERING THAT IT WOULD BE AMORTIZED OVER AN APPROXIMATE TEN TO TWELVE YEAR PERIOD OF USAGE.

3. IT IS PLANNED, THROUGH APPROPRIATE CHANNELS WHEN COMPETITION DEVELOPS, TO RECOMMEND A CHANGE TO BOTH MIL-M-18900C (SHIPS) AND FEDERAL SPECIFICATION 00-M-38B TO INCORPORATE REQUIREMENTS AS AN ADDITIONAL ITEM, FOR A MIXER THAT WILL ALLOW REMOVAL OF THE MIXING BOWL WITHOUT REMOVAL OF THE ATTACHMENT. SPACE LIMITATIONS AND DESIRES OF THE OTHER SERVICES WILL STILL REQUIRE RETENTION OF THE MIXERS NOW CALLED FOR BY THE CURRENT SPECIFICATIONS.

IN FORWARDING THE REPORT THROUGH ADMINISTRATIVE CHANNELS, THE CONTRACTING OFFICER MADE THE FOLLOWING STATEMENT:

THE STATEMENTS IN THE NAVSUPRANDFAC LETTER REGARDING RESTRICTIVENESS OF REQUIREMENTS ARE CONSISTENT WITH THE PATTERN OF PRODUCT DEVELOPMENT IN ALL LINES EXCEPT WHERE THE PRESENCE OF A PATENTED FEATURE PRECLUDES THE POSSIBILITY OF COMPETITIVE PRODUCTS. IN THIS PARTICULAR CASE, THE TALL COLUMN, ALTHOUGH PROPRIETARY, MERELY REPRESENTS A TECHNOLOGICAL ADVANCE WHICH MEETS A KNOWN REQUIREMENT OF THE NAVY. TO RESTRICT PROCUREMENT TO ITEMS WHICH DO NOT CONTAIN THIS FEATURE DEFEATS THE VERY PURPOSE FOR WHICH ACTIVITIES SUCH AS SUPRANDFAC WERE ESTABLISHED, LEADS TO STAGNATION OF DESIGN, AND WOULD EVENTUALLY RESULT IN HAVING COMMERCIAL CONCERNS DICTATE LEVELS OF PERFORMANCE AND MANUFACTURE. SUCH A SITUATION WOULD BE INIMICAL TO THE PROPER PERFORMANCE OF THE MISSION OF ANY ORGANIZATION, WHETHER GOVERNMENT OR COMMERCIAL.

AFTER REVIEW OF THE INFORMATION OF RECORD, THE DEPARTMENT OF THE NAVY, BUREAU OF SUPPLIES AND ACCOUNTS, REPORTS IT IS THE ADMINISTRATIVE VIEW THAT THE SPECIFICATION REQUIREMENTS OF INVITATION NO. 111-91-64 REPRESENTED THE GOVERNMENT'S MINIMUM NEEDS. IT IS ALSO STATED THAT THE NAVY IS PARTICIPATING IN A JOINT PROGRAM WITH THE DEFENSE SUPPLY AGENCY TO UP-DATE EXISTING SPECIFICATIONS FOR FOOD PREPARATION AND SERVING EQUIPMENT AND TO DEVELOP SPECIFICATIONS FOR ITEMS OF EQUIPMENT FOR WHICH THERE ARE PRESENTLY NO ADEQUATE SPECIFICATIONS, AND, AS INDICATED IN THE FACILITY'S REPORT, CHANGES WILL BE RECOMMENDED TO THE EXISTING FEDERAL AND MILITARY SPECIFICATIONS FOR FOOD MIXING MACHINES.

FROM THE FOREGOING IT APPEARS THAT AFTER EXTENSIVE ADMINISTRATIVE CONSIDERATION OF THE PROCUREMENT, IT IS THE NAVY'S VIEW THAT THE SPECIFICATIONS OF THE INVITATION ARE NO MORE THAN AN EXPRESSION OF THE BONA FIDE NEEDS OF THE USING AGENCY, AND THAT THE EXISTING FEDERAL SPECIFICATION 00-M-38B (TO WHICH CHANGES ARE BEING RECOMMENDED IN ACCORDANCE WITH PERTINENT REGULATIONS) IS NOT ADEQUATE TO MEET THE GOVERNMENT'S MINIMUM NEEDS FOR THIS PROCUREMENT. IN VIEW OF THE ABOVE ADMINISTRATIVE STATEMENTS AND SINCE DETERMINATIONS AS TO WHETHER AN EXISTING FEDERAL SPECIFICATION WILL MEET THE ACTUAL NEEDS OF THE GOVERNMENT IN A PARTICULAR SITUATION AND THE DRAFTING OF APPROPRIATE CONTRACT SPECIFICATIONS TO REFLECT THOSE NEEDS ARE PRIMARILY THE RESPONSIBILITY OF THE AGENCY CONCERNED, THIS OFFICE CANNOT CONCLUDE THAT THE DETERMINATION THAT THE PARTICULAR NEEDS OF THE PROCURING ACTIVITY JUSTIFIED A DEVIATION FROM THE FEDERAL SPECIFICATION WAS ARBITRARY OR CAPRICIOUS. WHILE YOU ASSERT THAT THE INVITATION SPECIFICATION CONTAINED RESTRICTIVE PROPRIETARY FEATURES AND YOU FEAR THAT SUCH FEATURES MAY BE MADE A PART OF FUTURE INVITATIONS FOR BIDS, WHICH APPEARS LIKELY IF NAVY'S RECOMMENDATION FOR CHANGES IN THE EXISTING FEDERAL AND MILITARY SPECIFICATIONS FOR FOOD MIXING MACHINES IS ADOPTED, IT IS WELL ESTABLISHED THAT THE GOVERNMENT DOES NOT VIOLATE EITHER THE LETTER OR THE SPIRIT OF THE COMPETITIVE BIDDING STATUTES MERELY BECAUSE ONLY ONE FIRM CAN SUPPLY ITS LEGITIMATE NEEDS. YOUR ASSERTION THAT THE SPECIFICATION CONTAINING THE UNIMPEDED BOWL-CHANGING FEATURE OF THE HOBART TALL-COLUMN MODEL, OR EQUAL, IS RESTRICTIVE, MAY BE TRUE TO THE EXTENT THAT IT PREVENTED YOU FROM SUBMITTING A RESPONSIVE BID WITHOUT CHANGING YOUR COMMERCIAL OR STANDARD EQUIPMENT TO INCORPORATE THAT FEATURE. IN THIS SENSE, OF COURSE, ALL SPECIFICATIONS ARE RESTRICTIVE SINCE THE REQUIREMENTS THEY NECESSARILY ESTABLISH PRECLUDE THE PURCHASE OF NON-CONFORMING ITEMS. HOWEVER, THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED, NOR DO THE PROCUREMENT REGULATIONS SEEM TO CONTEMPLATE THE USE OF INADEQUATE FEDERAL AND MILITARY SPECIFICATIONS BUT INSTEAD PROVIDE FOR DEVIATIONS THEREFROM TOGETHER WITH THE TAKING OF ACTION TO HAVE SUCH SPECIFICATIONS AMENDED OR REVISED TO REFLECT THAT WHICH IS DETERMINED TO CURRENTLY REPRESENT THE GOVERNMENT'S MINIMUM NEEDS.

IT APPEARS THAT YOUR POINT THAT THE INVITATION, BY INCORPORATING THE EASIER BOWL-CHANGING FEATURE OF THE HOBART TALL-COLUMN MODEL, IN EFFECT ELIMINATES ALL OTHER MANUFACTURERS OF MIXERS FROM THE COMPETITIVE BIDDING, IS WELL TAKEN, ESPECIALLY SINCE THE CONTRACTING OFFICER SOLICITED BIDS FROM 14 DEALERS AND MANUFACTURERS AND THE ONLY RESPONSIVE BIDS RECEIVED WERE ON THE HOBART MIXER. AS INDICATED IN THE FIRST PARAGRAPH OF THE NAVAL SUPPLY RESEARCH AND DEVELOPMENT FACILITY REPORT OF FEBRUARY 13, THE QUESTION OF WHETHER A COMPANY IS AT ANY POINT IN TIME A SOLE SOURCE OF A GIVEN ITEM IS DIFFICULT TO RESOLVE, SINCE ANOTHER FIRM MAY HAVE PRIVATE INTENTIONS TO ENTER THE MARKET AT THE FIRST OPPORTUNITY, OR ONE MAY BE WILLING TO ALTER ITS COMMERCIAL OR STANDARD EQUIPMENT IN ORDER TO COMPETE FOR A PARTICULAR PROCUREMENT OR BUSINESS. HOWEVER, IF HOBART MANUFACTURING COMPANY IS THE ONLY CONCERN WHICH PRODUCES A MIXER WITH THE UNRESTRICTED BOWL-CHANGING FEATURE, THEN IT FOLLOWS THAT IT MAY HAVE BEEN AFFORDED THE OPPORTUNITY OF QUOTING A HIGH PRICE UNDER THE ASSUMPTION THAT THE ONLY COMPETITION IT NEED FEAR FROM OTHER BIDDERS WOULD BE FROM DEALERS IN THE HOBART ITEM WHOSE COST FOR THE ITEM IS KNOWN TO THE COMPANY. HAVE NO INFORMATION INDICATING THAT THE HOBART MANUFACTURING COMPANY'S PRICE OF $2,978.75, WHICH IS $21.25 LESS THAN THE DEALER'S (CASSON CORPORATION) BID, IS UNREASONABLE, AND THE PRIMARY RESPONSIBILITY FOR DETERMINING WHETHER A BID PRICE IS, OR IS NOT, REASONABLE IS PROPERLY IMPOSED UPON THE CONTRACTING AGENCY RATHER THAN THIS OFFICE. HOWEVER, IN THE PROCUREMENT OF ITEMS KNOWN TO BE PROPRIETARY, IT IS OUR VIEW THAT IT IS PREFERABLE TO UTILIZE A METHOD OF PROCUREMENT WHICH ENABLES THE GOVERNMENT TO ASSURE ITSELF OF THE REASONABLENESS OF THE PRICE.

SINCE THE AWARD HAS BEEN MADE AND SINCE, FOR THE REASONS STATED, WE DO NOT FIND THAT THE NONUSE OF FEDERAL SPECIFICATION 00-M-38B IN THE PROCUREMENT WAS WHOLLY WITHOUT JUSTIFICATION, WE DO NOT FEEL THAT WE WOULD NOW BE JUSTIFIED IN DISTURBING THE ACTION TAKEN, AND YOUR PROTEST IS DENIED.

HOWEVER, IN VIEW OF THE FACTS STATED IN YOUR LETTER OF MAY 4, 1964, INDICATING THAT THE RESTRICTIVE FEATURES OF THE INVITATION HERE COMPLAINED OF ARE BEING CONTINUED IN LATER PROCUREMENTS, WE ARE BRINGING THE MATTER TO THE ATTENTION OF THE SECRETARY OF THE NAVY AND SUGGESTING THAT PROCEDURES FOR OBTAINING DEVIATIONS FROM STANDARD SPECIFICATIONS BE REVIEWED AND STRENGTHENED.