B-169924, B-170426, JUN 25, 1971

B-169924, B-170426, JUN 25, 1971

BID PROTEST - SOLE SOURCE PROCUREMENT - CLARIFICATION PRIOR DECISIONS CLARIFICATION OF DECISIONS OF NOVEMBER 24, 1970, AND FEBRUARY 10, 1971, CONCERNING SOLE SOURCE PROCUREMENT FROM ITT GILFILLAN, INC. AIR FORCE RESPONSE IN MESSAGE TO STERLING LABORATORIES INDICATING RFP HAS BEEN ISSUED ONLY TO STERLING, DOES NOT APPEAR CONSISTENT WITH INTENTION OF DECISIONS TO PROMOTE COMPETITION. ALL PORTIONS OF PREVIOUS SOLICITATIONS, EXCEPT THOSE PERTAINING TO PROCUREMENT OF 15 MODIFICATION KITS, SHOULD BE RESUBMITTED FOR COMPETIVE PROCUREMENT.

TO ITT GILFILLAN, INCORPORATED:

WE REFER TO YOUR LETTERS OF MARCH 10 AND APRIL 30, 1971, IN WHICH YOU ASK TO BE ADVISED OF THE LEGAL BASIS FOR REFUSING TO PERMIT GILFILLAN TO COMPETE FOR THE 15 MODIFICATION KITS DISCUSSED IN OUR DECISION OF FEBRUARY 10, 1971.

IN OUR DECISION OF NOVEMBER 24, 1970, WE CONCLUDED THAT THE AIR FORCE SHOULD REEVALUATE THE NEED FOR THE ITEMS INCLUDED IN THE PROCUREMENT AND AS TO THOSE ITEMS OBTAINABLE ONLY FROM ITTG WITHIN THE TIME REQUIRED, A SOLE SOURCE PROCUREMENT SHOULD BE MADE; BUT WHERE TIME AND AVAILABILITY PERMITTED, THE ITEMS SHOULD BE RECOMPETED. FOLLOWING OUR DECISION OF NOVEMBER 24, THE AIR FORCE ON DECEMBER 3, 1970, AWARDED TO ITT GILFILLAN 100 PERCENT OF ALL THE ITEMS COVERED BY BOTH SOLICITATIONS EXCEPT FOR AN OPTION QUANTITY OF 15 INCLUDED IN RFP 2269.

IN OUR DECISION OF FEBRUARY 10, 1971, WE NOTED THAT THE BASELINE MODIFICATION KITS HAD BEEN PURCHASED PREVIOUSLY WITHOUT THE LOG FTC; THAT STERLING HAD BEEN GIVEN AN AFFIRMATIVE RATING BY THE PREAWARD SURVEY TEAM AS TO ITS ABILITY TO FURNISH THE BASELINE KITS WITHIN 90 DAYS AFTER RECEIPT OF ORDER; AND THAT THE ACTION TAKEN BY THE AIR FORCE ON DECEMBER 3 RESULTED IN THE PERPETUATION OF A SOLE SOURCE FOR THE EQUIPMENT AT A CONSIDERABLY HIGHER COST AND PRECLUDED COMPETITION WHICH DEMONSTRABLY COULD HAVE BEEN OBTAINED FOR OVER 80 PERCENT OF THE VALUE. WE STATED THAT SUCH COMPETITION WAS REQUIRED BOTH BY LAW AND IMPLEMENTING REGULATIONS. BECAUSE SUCH COMPETITION HAD NOT BEEN OBTAINED, WE CONCLUDED THAT THE AWARD OF BOTH SOLICITATIONS TO ITT GILFILLAN WAS LEGALLY INVALID. SUGGESTED AS A POSSIBLE ALTERNATIVE TO CANCELLATION OF SOLICITATION 2269, THE AWARD OF THE OPTION QUANTITY OF 15 TO STERLING.

WE ARE NOW ADVISED THAT THE AIR FORCE HAS ISSUED A REQUEST FOR PROPOSALS TO STERLING ON A SOLE SOURCE BASIS FOR A QUANTITY OF 15 KITS. WE HAVE ALSO RECEIVED A COPY OF A MESSAGE TO STERLING LABORATORIES FROM THE AIR FORCE DATED JUNE 22, 1971, INDICATING THAT LETTER REQUEST FOR PROPOSAL F34601-71-R-2137 HAS BEEN ISSUED TO STERLING ALONE AND THAT THE OPENING DATE OF THE SOLICITATION TO BE SUBMITTED UNDER THE REQUEST FOR PROPOSALS HAS BEEN EXTENDED 30 DAYS FROM JUNE 21, 1971, TO JULY 22, 1971.

WHILE WE ARE NOT IN A POSITION TO DECIDE THE AIR FORCE'S INTERPRETATION OF OUR DECISION OF FEBRUARY 10, 1971, IT DOES NOT APPEAR THAT THE ACTION OF THE AIR FORCE IS CONSISTENT WITH OUR INTENTION IN ISSUING THAT DECISION. AS WE MADE CLEAR IN OUR DECISION OF NOVEMBER 24, 1970, BOTH THE LAW AND THE REGULATIONS REQUIRE THAT COMPETITION BE OBTAINED TO THE MAXIMUM PRACTICABLE EXTENT IN THE AWARD OF NEGOTIATED PROCUREMENTS.

IN ISSUING OUR DECISION OF FEBRUARY 10, 1971, WE INTENDED TO RECOMMEND TO THE AIR FORCE THAT IT AWARD ONLY THE PORTION OF THE PREVIOUSLY SOLICITED PROCUREMENT WHICH WAS STILL AVAILABLE FOR AWARD, THAT IS, THE QUANTITY OF 15 MODIFICATION KITS. THIS PORTION OF THE PROCUREMENT HAS ALREADY BEEN COMPETED. THERE IS A VALID AND SUBSISTING OFFER BY STERLING TO PERFORM. STERLING, BY ITS ACTIONS, HAS INDICATED ITS READINESS AND WILLINGNESS TO UNDERTAKE SUCH PERFORMANCE.

BUT EVEN IF THIS WERE NOT THE CASE, WE HAVE SERIOUS QUESTION AS TO WHETHER STERLING COULD NOW DECLINE TO ACCEPT THE AWARD IN VIEW OF THE FACT THAT THE PROTEST WHICH RESULTED IN OUR DECISION OF NOVEMBER 24, 1970, AND THE REQUEST FOR RECONSIDERATION WHICH RESULTED IN OUR DECISION OF FEBRUARY 10, 1971, WERE INITIATED BY STERLING. WE HAVE HELD THAT SUCH ACTION CONTINUES AN OFFER BEYOND THE TIME PRESCRIBED BY THE OFFER ITSELF. 170178, NOVEMBER 12, 1970. WHILE A VALID AWARD ON AN OFFER MAY BE A REJECTION OF OTHER OFFERS, AN INVALID AWARD DOES NOT TERMINATE OTHER OFFERS.

WE TRUST THE FOREGOING EXPLANATION WILL CLARIFY THE MATTER. WE ARE TAKING THE LIBERTY OF SENDING A COPY OF THIS LETTER TO THE SECRETARY OF THE AIR FORCE AND TO STERLING.