B-140138, DECEMBER 31, 1959, 39 COMP. GEN. 490

B-140138: Dec 31, 1959

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IS NOT OVERCOME ON THE BASIS OF A STATEMENT THAT THE OFFEROR WOULD COMPLY WITH THE SPECIFICATIONS OR ON THE BASIS OF EXPERIENCE IN HAVING FURNISHED ANOTHER MILITARY INSTALLATION WITH EQUIPMENT. PARTICULARLY WHEN THE NECESSITY FOR DETAILED TECHNICAL INFORMATION FOR EVALUATION PURPOSES WAS ONE OF THE PRIMARY REASONS FOR USING NEGOTIATED PROCUREMENT PROCEDURES RATHER THAN FORMAL ADVERTISING PROCEDURES. THAT AFTER EXTENSIVE FIELD TESTS THE SYSTEMS WERE DETERMINED TO BE INADEQUATE BECAUSE OF CONDITIONS ENCOUNTERED AT WHITE SANDS MISSILE RANGE. THE SYSTEM WAS NOT COMPATIBLE WITH LARGE FREQUENCY CHANGES BY THE MISSILE PROJECTS. THE DEFICIENCIES OF THE AH/USQ-11 MDI WERE SUCH THAT CONSIDERABLE IMPROVEMENT WAS REQUIRED IN ORDER TO MEET THE REQUIREMENTS OF WHITE SANDS MISSILE RANGE.

B-140138, DECEMBER 31, 1959, 39 COMP. GEN. 490

CONTRACTS - NEGOTIATION - FAILURE TO FURNISH TECHNICAL DATA THE FAILURE OF A LOW OFFEROR TO SUPPLY DETAILED TECHNICAL INFORMATION REQUESTED INCIDENT TO A PROCUREMENT FOR A COMPLEX ELECTRONICS SYSTEM, NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (1), IS NOT OVERCOME ON THE BASIS OF A STATEMENT THAT THE OFFEROR WOULD COMPLY WITH THE SPECIFICATIONS OR ON THE BASIS OF EXPERIENCE IN HAVING FURNISHED ANOTHER MILITARY INSTALLATION WITH EQUIPMENT, PARTICULARLY WHEN THE NECESSITY FOR DETAILED TECHNICAL INFORMATION FOR EVALUATION PURPOSES WAS ONE OF THE PRIMARY REASONS FOR USING NEGOTIATED PROCUREMENT PROCEDURES RATHER THAN FORMAL ADVERTISING PROCEDURES.

TO TECHNER, RUBIN AND SHAPIRO, DECEMBER 31, 1959:

PURSUANT TO YOUR REQUEST, THE DEPARTMENT OF THE ARMY FORWARDED FOR OUR CONSIDERATION YOUR PROTEST ON BEHALF OF AIRCRAFT ARMAMENTS, INC., AGAINST THE REJECTION OF ITS PROPOSAL SUBMITTED IN RESPONSE TO REQUEST FOR QUOTATION NO. 766-59 ISSUED ON NOVEMBER 3, 1958, BY WHITE SANDS MISSILE RANGE, NEW MEXICO, FOR THREE GROUND STATIONS, MISS - DISTANCE INDICATORS.

THE RECORD INDICATES THAT THE WHITE SANDS MISSILE RANGE HAD TWO NAVAL ORDNANCE LABORATORY AH/USQ-11 MDI SYSTEMS IN OPERATION FOR SEVERAL MONTHS, AND THAT AFTER EXTENSIVE FIELD TESTS THE SYSTEMS WERE DETERMINED TO BE INADEQUATE BECAUSE OF CONDITIONS ENCOUNTERED AT WHITE SANDS MISSILE RANGE. THE CONGESTION OF THE FREQUENCY SPECTRUM REQUIRED NARROW BAND RECEIVERS. THE SENSITIVITY OF THE AH/USQ/-11 MDI SYSTEM LIMITED THE OPERATING RANGE TO APPROXIMATELY 10 MILES. ALSO, THE SYSTEM WAS NOT COMPATIBLE WITH LARGE FREQUENCY CHANGES BY THE MISSILE PROJECTS.

THE DEFICIENCIES OF THE AH/USQ-11 MDI WERE SUCH THAT CONSIDERABLE IMPROVEMENT WAS REQUIRED IN ORDER TO MEET THE REQUIREMENTS OF WHITE SANDS MISSILE RANGE. THEREFORE, A NEW SPECIFICATION MDS-EM 810-7 WAS DRAWN UP BY WHITE SANDS MISSILE RANGE ENGINEERS TO CORRECT THE DEFICIENCIES OF THE EXISTING SYSTEMS. THE CONTRACTING OFFICER PRESENTED THIS NEW REQUIREMENT TO THE WHITE SANDS MISSILE RANGE BOARD OF ASSIGNMENTS. THE BOARD REVIEWED THE SPECIFICATIONS AND DETERMINED THAT THEY WERE NOT ADEQUATE FOR FORMAL ADVERTISING NOR WAS IT FEASIBLE DUE TO THE COMPLEXITY OF THE SYSTEM TO COMPILE ADEQUATE SPECIFICATIONS FOR FORMAL ADVERTISING. THE BOARD RECOMMENDED NEGOTIATION OF THE PROCUREMENT PURSUANT TO 10 U.S.C. 2304 (A) (1). THE CONTRACTING OFFICER CONCURRED IN THE BOARD OF ASSIGNMENTS' RECOMMENDATIONS AND ASSIGNED THE PROCUREMENT TO THE NEGOTIATION BRANCH.

A REQUEST FOR QUOTATION WAS PREPARED AND SENT TO 14 POTENTIAL SUPPLIERS: THIS REQUEST HAD THE FOLLOWING STATEMENTS ON ITS FACE:

A WRITTEN PROPOSAL OR DESCRIPTIVE LITERATURE ADEQUATE FOR EVALUATION OF THE SYSTEM OFFERED IS REQUIRED IN ORDER THAT CONSIDERATION MAY BE GIVEN TO QUOTATIONS MADE IN RESPONSE TO THIS REQUEST FOR QUOTATION. THOSE QUOTATIONS NOT COMPLYING WITH THE ABOVE REQUIREMENT WILL NOT BE CONSIDERED.

THE ABOVE QUOTED REQUIREMENT WAS CONSIDERED NECESSARY BY THE USING ACTIVITY SO THAT OFFERS COULD BE TECHNICALLY EVALUATED TO DETERMINE THAT THE SYSTEM OFFERED WOULD BE ENGINEERED TO MEET THE EXACTING REQUIREMENTS AND WOULD BE COMPATIBLE WITH THE BALANCE OF THE MISS DISTANCE INDICATOR SYSTEM.

SEVEN PROPOSALS WERE RECEIVED IN RESPONSE TO THE REQUEST. AIRCRAFTS ARMAMENTS, INC., SUBMITTED A PROPOSAL DATED NOVEMBER 28, 1958, OFFERING TWO ALTERNATE SYSTEMS. IN THIS CONNECTION IT IS STATED IN YOUR LETTER OF JULY 28, 1959, TO THE CONTRACTING OFFICER, IN PART, AS FOLLOWS:

BOTH SYSTEMS PROPOSED WERE DESCRIBED IN DETAIL IN THE TECHNICAL REPORT SUBMITTED WITH OUR QUOTATION. IN DECIDING TO SUBMIT SYSTEMS WHICH DID MEET ALL OF THE REQUIREMENTS OF THE SPECIFICATION, THIS CONTRACTOR TOOK INTO ACCOUNT THE FACT THAT THIS WOULD ENABLE THE GOVERNMENT TO PROCURE AT A CHEAPER PRICE, UNITS WHICH WOULD MEET ALL OF THE OPERATIONAL REQUIREMENTS OF THE WHITE SANDS MISSILE RANGE. A COPY OF OUR PROPOSAL LETTER 54649/EP-3102,01 DATED 29 NOVEMBER 1958, AND A COPY OF OUR REPORT ER-1540 ARE FURNISHED HEREWITH AS EXHIBIT "A.'

UPON EVALUATION BOTH AIRCRAFT ARMAMENTS, INC., OFFERS WERE REJECTED AS NOT MEETING THE REQUIREMENTS OF THE SPECIFICATIONS AND THE CORPORATION WAS SO ADVISED. BY LETTER OF JANUARY 6, 1959, AIRCRAFT ARMAMENTS, INC., REVISED ITS ORIGINAL PROPOSAL BY CHANGING SOME OF THE COMPONENTS TO BE INCORPORATED INTO THE SYSTEM AND INCREASED ITS PRICE BY APPROXIMATELY $9,000. IN THIS PROPOSAL IT WAS STATED THAT THE REQUIREMENTS SUBPARAGRAPHS 8.1 AND 8.3 OF PARAGRAPH 8 WOULD BE MET BY THE USE OF COLLINS 70H-2 TUNABLE OSCILLATORS IN LIEU OF HEWLETT-PACKARD MODEL 200AB AUDIO OSCILLATORS ORIGINALLY PROPOSED. IT IS REPORTED THAT THE DIRECT SUBSTITUTION OF THE COLLINS FOR THE HEWLETT-PACKARD OSCILLATORS AS ORIGINALLY SHOWN COULD NOT BE CONSIDERED AS MEETING THE REQUIREMENTS OF THE SPECIFICATIONS AND, THEREFORE, THE OFFER WAS DETERMINED TO BE INADEQUATE.

ALTHOUGH IT WAS PROPOSED TO MAKE AN AWARD IN JANUARY 1959, FUNDS FOR THE PROJECT WERE FROZEN AND AN AWARD WAS SUSPENDED PENDING THE AVAILABILITY OF FUNDS. THE NECESSARY FUNDS WERE MADE AVAILABLE IN JUNE AND THE AWARD WAS MADE TO A.R.F. PRODUCTS, INC., ON JUNE 19, 1959.

DURING JANUARY 1959, A REPRESENTATIVE OF AIRCRAFT ARMAMENTS, INC., CALLED ON THE TECHNICAL ACTIVITY AT WHITE SANDS MISSILE RANGE AND AT THAT TIME HE WAS ADVISED THAT HIS COMPANY'S REVISED PROPOSAL WAS CONSIDERED INADEQUATE. THE REPRESENTATIVE STATED THAT HIS COMPANY WOULD CONSIDER MAKING A NEW PROPOSAL AND HE WAS ADVISED THAT WHITE SANDS MISSILE RANGE WOULD CONSIDER ANY LATE PROPOSALS OR REVISIONS TO PROPOSALS IF RECEIVED PRIOR TO AWARD. OTHER REPRESENTATIVES OF AIRCRAFT ARMAMENTS, INC., IMPLIED DURING THE PERIOD JANUARY THROUGH JUNE BY TELEPHONE AND PERSONAL CALLS THAT THEY WERE NOT SATISFIED WITH THE PROPOSAL AND INDICATED THAT THEY MIGHT BE INTERESTED IN PREPARING A NEW PROPOSAL BASED ON A BETTER UNDERSTANDING OF WHITE SANDS REQUIREMENTS AFTER DISCUSSIONS WITH ITS ENGINEERS. A NEW PROPOSAL OR TECHNICAL EXPLANATIONS OF THE JANUARY 6, 1959, REVISION WERE NEVER SUBMITTED, AND, THEREFORE, IT WAS ASSUMED THAT AIRCRAFT ARMAMENTS, INC., WAS UNABLE TO SHOW HOW THE COLLINS OSCILLATORS WOULD MAKE THEIR MDI SYSTEM MEET WHITE SANDS MISSILE RANGE SPECIFICATION MDS-EM-810-7, OR HAD LOST INTEREST. SINCE AIRCRAFT ARMAMENTS, INC., WAS NOT MEETING THE GOVERNMENT'S REQUIREMENTS, OR AT LEAST WERE UNABLE OR UNWILLING TO SHOW HOW IT WAS TO BE DONE, NEGOTIATIONS AS TO PRICE, ETC., WERE CONSIDERED RELATIVELY UNIMPORTANT AND WERE NOT PURSUED. THE AWARD WAS MADE TO A.R.F. PRODUCTS, INC., WHO HAD DEMONSTRATED THAT IT UNDERSTOOD AND OFFERED TO MEET THE GOVERNMENT'S REQUIREMENTS. IN THIS CONNECTION IT IS STATED IN YOUR LETTER OF JULY 28, 1959, AS FOLLOWS:

UPON MAKING A VISIT, MR. A. C. HART, THIS COMPANY'S SALES REPRESENTATIVE WAS INFORMED BY MESSERS. ALEXANDER AND REYNOLDS ON 22ND AND 23 JANUARY, 1959, THAT OUR REVISED QUOTATION WAS CONSIDERED TO BE NON-RESPONSIVE IN THAT IT DID NOT FURNISH SUFFICIENT INFORMATION FOR THE MISSILE RANGE PERSONNEL TO DETERMINE WHETHER THE REVISED SYSTEM PROPOSED WOULD MEET THE REQUIREMENTS OF THE SPECIFICATION. AFTER RECEIVING MR. HART'S REPORT, THIS CONTRACTOR CONSIDERED THE DESIRABILITY OF FURTHER REVISING ITS QUOTATION, BUT DECIDED THAT THE TIME AND COST INVOLVED DID NOT JUSTIFY FURTHER REVISION SINCE THE INFORMATION ALREADY FURNISHED WAS SUFFICIENT TO ENABLE ANYONE FAMILIAR WITH STANDARD ELECTRONIC TECHNIQUES AND PRACTICES TO DETERMINE WHETHER THE SYSTEM PROPOSED WOULD MEET THE SPECIFICATION REQUIREMENTS.

AFTER THE AWARD TO A.R.F. PRODUCTS, INC., IN JUNE 1959, AIRCRAFT ARMAMENTS, INC., PROTESTED THE AWARD ON THE BASIS (1) THE ORIGINAL QUOTATION, TOGETHER WITH THE SUPPLEMENTAL LETTER OF JANUARY 6, 1959, CONSTITUTED A COMPLETELY RESPONSIVE PROPOSAL UNDER THE REQUIREMENTS OF THE REQUEST FOR PROPOSAL, (2) THE QUOTATION OFFERED A MISS-DISTANCE INDICATOR GROUND STATION MEETING ALL REQUIREMENTS OF THE SPECIFICATION AT A LOWER PRICE THAN THE PRICE FOR WHICH AN AWARD WAS MADE TO A.R.F. PRODUCTS, INC., (3) ALTHOUGH THE BASIC AH/USQ-11 MDI SYSTEM WAS ORIGINALLY DEVELOPED BY SCIENTISTS AT THE NAVAL ORDNANCE LABORATORY, AIRCRAFT ARMAMENTS, INC., PERFORMED THE PRODUCTION ENGINEERING FOR THE SYSTEM AND IS PRESENTLY PRODUCING THE SYSTEM AND, THEREFORE, IT IS OBVIOUS THAT AIRCRAFT ARMAMENTS, INC., MUST HAVE A BETTER UNDERSTANDING OF THIS EQUIPMENT THAN ANY OTHER BIDDER AND HAS THE NECESSARY FACILITIES AND EQUIPMENT TO PRODUCE IT, (4) AIRCRAFT ARMAMENTS, INC., HAS A BROAD BACKGROUND OF EXPERIENCE IN DESIGNING, DEVELOPING AND PRODUCING MILITARY ELECTRONIC EQUIPMENT AND, IN VIEW OF THE STATEMENT IN ITS QUOTATION THAT IT WOULD SUPPLY MISS-DISTANCE INDICATOR GROUND STATIONS MEETING ALL REQUIREMENTS OF THE SPECIFICATIONS AND ITS EXPERIENCE, BACKGROUND, AND DEMONSTRATED ABILITY TO PRODUCE THIS TYPE OF EQUIPMENT, ANY OBJECTION TO THE SUFFICIENCY OF THE DETAILED TECHNICAL DATA IN ITS PROPOSAL WOULD SEEM TO BE IMMATERIAL, AND (5) THE FACT THAT AIRCRAFT ARMAMENTS' BUSINESS REPUTATION, CAPABILITY, AND RESPONSIBILITY FOR PROPER CONTRACT PERFORMANCE CANNOT BE QUESTIONED SHOULD HAVE BEEN THE DETERMINING FACTORS IN MAKING THE AWARD.

IN VIEW OF THE FACTS AND CIRCUMSTANCES AS REPORTED BY THE DEPARTMENT OF THE ARMY AND OF YOUR OWN STATEMENTS, WE CANNOT AGREE WITH THE REASONS SET FORTH AS THE BASIS FOR THE PROTEST.

AIRCRAFT ARMAMENTS, INC., WAS ADVISED BY WHITE SANDS MISSILE RANGE THAT THE PROPOSAL OF NOVEMBER 28, 1958, AS MODIFIED BY LETTER OF JANUARY 6, 1959, WAS NOT ADEQUATE, PARTICULARLY WITH RESPECT TO THE DATA REQUIRED TO BE SUBMITTED SHOWING HOW THE SYSTEM OFFERED WOULD BE ENGINEERED TO MEET THE GOVERNMENT'S PARTICULAR NEEDS. DURING A FIVE MONTH INTERVAL NO ATTEMPT WAS MADE BY AIRCRAFT ARMAMENTS TO SUBMIT SUPPLEMENTAL OR REVISED DATA, IT HAVING BEEN DETERMINED BY AIRCRAFT ARMAMENTS THAT "THE TIME AND COST INVOLVED WOULD NOT JUSTIFY FURTHER REVISION.'

AIRCRAFT ARMAMENTS, INC., EXPERIENCE IN CONNECTION WITH NAVAL ORDNANCE LABORATORY AH/USQ-11 MDI SYSTEM AND ITS GENERAL BUSINESS REPUTATION, CAPABILITY AND RESPONSIBILITY FOR PROPER CONTRACT PERFORMANCE WERE NEVER QUESTIONED; THERE WAS NO OCCASION TO DO SO. SINCE A REQUEST FOR PROPOSAL WAS SENT TO THE COMPANY, IT CAN ONLY BE ASSUMED THAT WHITE SANDS MISSILE RANGE BELIEVED THAT THE COMPANY WAS CAPABLE OF SUPPLYING THE SYSTEM IF IT SO DESIRED. THE FACT THAT THE COMPANY WAS EXPERIENCED IN CONNECTION WITH THE NAVAL ORDNANCE LABORATORY SYSTEM AH/USQ-11 MDI SYSTEM HAD BEEN TRIED AND FOUND INADEQUATE.

THE REQUEST FOR PROPOSAL SPECIFICALLY REQUIRED PROPOSALS TO BE ACCOMPANIED WITH DETAILED INFORMATION IN ORDER THAT THE PROPOSALS COULD BE TECHNICALLY EVALUATED SO AS TO PRECLUDE POTENTIAL CONTRACTORS FROM OFFERING SYSTEMS WHICH WOULD HAVE THE SAME SHORTCOMINGS AS THE EXISTING SYSTEMS. THIS WAS ONE OF THE PRIMARY REASONS WHY THE PROCUREMENT WAS NEGOTIATED RATHER THAN ACCOMPLISHED UNDER FORMAL ADVERTISING PROCEDURES. WE WOULD NOT BE WARRANTED IN QUESTIONING THE ADMINISTRATIVE DETERMINATION IN THIS REGARD.

IN THE CIRCUMSTANCES, THERE IS NO APPARENT REASON WHY THE WHITE SANDS MISSILE RANGE SHOULD HAVE BEEN REQUIRED TO ACCEPT THE AIRCRAFT ARMAMENTS PROPOSAL ON THE BASIS OF ITS STATEMENT THAT IT WOULD COMPLY WITH THE SPECIFICATIONS WITHOUT THE SUBMISSION OF ADEQUATE TECHNICAL INFORMATION AS TO THE MANNER IT PROPOSED TO DO SO, AS SPECIFICALLY REQUIRED BY THE REQUEST FOR PROPOSALS AND, THEREFORE, WE FIND NO BASIS TO QUESTION THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE IN REJECTING THE PROPOSAL OF AIRCRAFT ARMAMENTS, INC. ..END :