B-143792, DECEMBER 9, 1960, 40 COMP. GEN. 348

B-143792: Dec 9, 1960

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WHO WAS THE THEN CURRENT CONTRACTOR. THAT QUALIFICATION OF ITS PRODUCT UNDER THE NEW PROCUREMENT WOULD BE REQUIRED SO THAT THE LOW BIDDER WOULD HAVE THE SAME TIME AS OTHER PROSPECTIVE BIDDERS TO QUALIFY HIS PRODUCT. WE WERE FURNISHED A REPORT IN RESPONSE TO OUR REQUEST OF AUGUST 26. BIDS WERE SOLICITED ON AN ALL-OR-NONE BASIS ONLY. OF THE PRODUCTS TO BE FURNISHED UNDER THE INVITATION WERE REQUIRED TO CONFORM TO INTERIM FEDERAL SPECIFICATION GGG-S-00620 WHICH INCLUDES THE FOLLOWING PROVISIONS: 6.3 QUALIFICATION. AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE. WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE. 6.3.1 THE ATTENTION OF SUPPLIERS IS CALLED TO THIS REQUIREMENT.

B-143792, DECEMBER 9, 1960, 40 COMP. GEN. 348

CONTRACTS - SPECIFICATIONS - QUALIFIED PRODUCTS - NOTICE AND TIME FOR QUALIFICATIONS THE FAILURE OF A PROCURING AGENCY TO GIVE A LOW BIDDER, WHO WAS THE THEN CURRENT CONTRACTOR, THE NOTIFICATION REQUIRED BY SECTION 1-1103.1 OF THE ARMED SERVICES PROCUREMENT REGULATION AND SECTION 1-1103.1 (A) OF THE AIR FORCE PROCUREMENT INSTRUCTION, THAT QUALIFICATION OF ITS PRODUCT UNDER THE NEW PROCUREMENT WOULD BE REQUIRED SO THAT THE LOW BIDDER WOULD HAVE THE SAME TIME AS OTHER PROSPECTIVE BIDDERS TO QUALIFY HIS PRODUCT, DEPRIVED THE UNITED STATES OF THE FULL AND FREE COMPETITION CONTEMPLATED BY THE REGULATIONS AND THE STATUTES; THEREFORE, A VALID AWARD MAY NOT BE MADE UNDER THE INVITATION.

TO THE SECRETARY OF THE AIR FORCE, DECEMBER 9, 1960:

BY LETTER OF NOVEMBER 18, 1960, WITH ENCLOSURES, FROM THE DEPUTY FOR PROCUREMENT AND PRODUCTION, WE WERE FURNISHED A REPORT IN RESPONSE TO OUR REQUEST OF AUGUST 26, 1960, ON A PROCUREMENT OF PRESCRIPTION TYPE SAFETY GLASSES INITIATED UNDER INVITATION FOR BIDS NO. 34-601-60-357.

THE INVITATION, ISSUED JUNE 17, 1960, BY THE OKLAHOMA CITY AIR MATERIAL AREA, COVERED ALL OF THE REQUIREMENTS OF THAT ACTIVITY FOR THE STATED TYPE OF GLASSES PLUS REPAIRS AND REPLACEMENT PARTS FROM DATE OF AWARD THROUGH JUNE 30, 1961. BIDS WERE SOLICITED ON AN ALL-OR-NONE BASIS ONLY. MOST, IF NOT ALL, OF THE PRODUCTS TO BE FURNISHED UNDER THE INVITATION WERE REQUIRED TO CONFORM TO INTERIM FEDERAL SPECIFICATION GGG-S-00620 WHICH INCLUDES THE FOLLOWING PROVISIONS:

6.3 QUALIFICATION.--- WITH RESPECT TO PRODUCTS REQUIRING QUALIFICATION, AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME SET FOR OPENING OF BIDS, BEEN TESTED AND APPROVED FOR INCLUSION IN QUALIFIED PRODUCTS LIST QPL-GGG-S-620, WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.

6.3.1 THE ATTENTION OF SUPPLIERS IS CALLED TO THIS REQUIREMENT, AND MANUFACTURERS ARE URGED TO ARRANGE TO HAVE THE PRODUCTS THAT THEY PROPOSE TO OFFER TO THE FEDERAL GOVERNMENT, TESTED FOR QUALIFICATION IN ORDER THAT THEY MAY BE ELIGIBLE TO BE AWARDED CONTRACTS OR ORDERS FOR THE PRODUCTS COVERED BY THIS SPECIFICATION. INFORMATION PERTAINING TO QUALIFICATION OR PRODUCTS COVERED BY THIS SPECIFICATION MAY BE OBTAINED FROM THE CHIEF OF THE BUREAU OF SHIPS, DEPARTMENT OF THE NAVY, WASHINGTON 25, D.C.

WITH RESPECT TO PRODUCT QUALIFICATION, THE INVITATION PROVIDES:

QUALIFIED PRODUCTS: THE ARTICLES CALLED FOR IN THIS INVITATION ARE "QUALIFIED PRODUCTS" AND REQUIRE QUALIFICATION TESTS. WITH RESPECT TO PRODUCTS REQUIRING QUALIFICATION, AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME SET FOR OPENING OF BIDS, BEEN TESTED AND QUALIFY FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST QPL GGG-S-00620 DATED 26 APRIL 1960, WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN INCLUDED IN THE LIST BY THAT DATE. MANUFACTURERS ARE URGED TO COMMUNICATE WITH THE BUREAU OF SHIPS, DEPARTMENT OF THE NAVY, WASHINGTON 25, D.C., AND ARRANGE TO HAVE THE PRODUCTS THAT THEY PROPOSE TO OFFER TESTED FOR QUALIFICATION. MANUFACTURERS HAVING PRODUCTS NOT YET LISTED, BUT WHICH HAVE BEEN QUALIFIED, ARE REQUESTED TO SUBMIT EVIDENCE OF SUCH QUALIFICATION WITH THEIR BIDS OR OFFERS, SO THAT THEY MAY BE GIVEN CONSIDERATION.

WHEN BIDS WERE OPENED AS SCHEDULED ON JULY 19, 1960, IT WAS FOUND THAT THE LOW BIDDER, TOM BROWN'S OPTICAL SERVICE, HAD NOT HAD ITS PRODUCTS QUALIFIED IN ACCORDANCE WITH THE PROVISIONS OF THE SPECIFICATIONS AND THE INVITATION, AND, THEREFORE, COULD NOT BE CONSIDERED FOR AWARD. IT SHOULD BE NOTED THAT THE LOW BIDDER HELD THE CONTRACT FOR THE PERIOD IMMEDIATELY PRIOR TO THAT COVERED BY THE INVITATION. THE EARLIER CONTRACT WAS AWARDED PURSUANT TO AN INVITATION AND SPECIFICATIONS WHICH HAD NO QUALIFICATION REQUIREMENTS SUCH AS THOSE QUOTED ABOVE.

WE ARE ADVISED THAT NO AWARD HAS YET BEEN MADE BUT IT IS PROPOSED TO REJECT THE LOW BID AND MAKE AWARD TO THE SECOND LOW BIDDER. A PROTEST HAS BEEN SUBMITTED ON BEHALF OF THE LOW BIDDER ALLEGING THAT INSUFFICIENT NOTICE WAS GIVEN TO PERMIT THAT FIRM TO QUALIFY ITS PRODUCTS WITHIN THE ALLOTTED TIME.

IN OUR DECISION AT 36 COMP. GEN. 809, WE FOUND THE QUALIFIED PRODUCTS METHOD OF PROCUREMENT TO BE LEGAL. WE NOTED, HOWEVER, AT 38 COMP. GEN. 357, THAT APPLICABLE REGULATIONS SHOULD PROVIDE SPECIFICALLY FOR PUBLICITY SUFFICIENTLY IN ADVANCE OF THE ISSUANCE OF AN INVITATION TO PERMIT INTERESTED MANUFACTURERS TO ARRANGE FOR QUALIFICATION TESTING. PURSUANT TO THE LATTER DECISION, SECTION 1-1103.1 OF THE ARMED SERVICES PROCUREMENT REGULATION HAD BEEN AMENDED TO PROVIDE, AT THE TIME THE INVITATION WAS ISSUED, AS FOLLOWS:

(A) UPON DETERMINATION THAT A PRODUCT IS TO BE COVERED BY A QUALIFIED PRODUCTS LIST, MANUFACTURERS SHALL BE URGED TO SUBMIT THEIR PRODUCTS FOR QUALIFICATION AND GENERALLY SHALL BE GIVEN SUFFICIENT TIME TO ARRANGE FOR QUALIFICATION TESTING PRIOR TO ISSUANCE OF THE INITIAL INVITATION FOR BIDS OR REQUEST FOR PROPOSALS FOR THE PRODUCT AS A QUALIFIED PRODUCT. * * * THE PUBLICITY GIVEN TO THE REQUIREMENT FOR QUALIFICATION TESTING SHALL INCLUDE THE FOLLOWING:

(I) AN INTENTION TO ESTABLISH A QUALIFIED PRODUCTS LIST FOR A PRODUCT:

(II) THE SPECIFICATION NUMBER AND NOMENCLATURE OF THE PRODUCT, AND THE NAME AND ADDRESS OF THE OFFICE TO WHICH THE REQUEST FOR QUALIFICATION SHOULD BE SUBMITTED; AND

(III) NOTICE THAT IN MAKING FUTURE AWARDS CONSIDERATION SHALL BE GIVEN ONLY TO SUCH PRODUCTS AS HAVE BEEN ACCEPTED FOR INCLUSION IN A QUALIFIED PRODUCTS LIST.

(B) CONTRACT SHALL BE MADE WITH COMPANIES KNOWN TO BE INTERESTED IN SUBMITTING PRODUCTS FOR QUALIFICATION TESTING UNDER THE APPLICABLE SPECIFICATIONS. WHERE APPROPRIATE TRADE ASSOCIATIONS IN A PARTICULAR INDUSTRY SHALL BE NOTIFIED.

(C) WHERE PRACTICABLE, NOTICES IN THE FOLLOWING FORM SHOULD BE SENT TO COMMERCIAL JOURNALS AND TRADE MAGAZINES OF THE INDUSTRY CONCERNED THROUGH ESTABLISHED CHANNELS FOR NEWS RELEASES:

THE (BUREAU, SERVICE OR COMMAND), DEPARTMENT OF THE ( ARMY, NAVY OR AIR FORCE), HAS ANNOUNCED THE INTENTION TO ESTABLISH A QUALIFIED PRODUCTS LIST FOR (ITEM) UNDER SPECIFICATION (SYMBOL). COMPANIES WHICH HAVE A PRODUCT MEETING THE REQUIREMENTS OF THIS SPECIFICATION ARE URGED TO CONTACT (NAME AND ADDRESS OF ACTIVITY) FOR AN OPPORTUNITY TO HAVE THEIR PRODUCTS TESTED, SINCE IN MAKING FUTURE AWARDS, CONSIDERATION MAY BE GIVEN ONLY TO SUCH PRODUCTS AS HAVE BEEN TESTED AND ACCEPTED FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST. ( AUG. 1959)

THE ABOVE NOTICE MAY ALSO BE SENT TO ALL FIRMS OR INDIVIDUALS ON THE APPROPRIATE BIDDERS MAILING LIST. WE READ THE FOREGOING TO MEAN THAT WHEN IT IS DETERMINED TO PROCURE A PRODUCT UNDER THE QUALIFIED PRODUCT PROCEDURE ALL FIRMS KNOWN TO BE INTERESTED WILL BE INDIVIDUALLY CONTACTED IN SUFFICIENT TIME TO ARRANGE FOR QUALIFICATION PRIOR TO THE FIRST PROCUREMENT AND ADVISED OF THE NEED FOR QUALIFICATION AND THE NAME AND ADDRESS OF THE AGENCY FROM WHICH FURTHER INFORMATION MAY BE OBTAINED.

IN IMPLEMENTATION OF THE ABOVE REGULATORY MATERIAL, THE AIR FORCE PROCUREMENT INSTRUCTION PROVIDES AT SECTION 1-1103.1 (A):

(3) WHEN A SPECIFICATION CONTAINING A QUALIFIED REQUIREMENT APPEARS ON THE DAILY ACTIVITY REPORT FOR THE FIRST TIME, CONTRACT FILES AND DISTRIBUTION BRANCH ( LMPMG), AMCASC, OR THE SERVICES ACTIVITY WITHIN THE AMA, DEPOT, OR OTHER AMC PROCUREMENT ACTIVITIES WILL OBTAIN A CURRENT SOURCE LIST AND NOTIFY ALL SOURCES THEREON BY LETTER, SAMPLE CITED IN AFPI 1-1103.1 (C), STATING THE AF POLICIES ON PROCUREMENT OF QUALIFIED PRODUCTS AND ENCOURAGE MANUFACTURERS TO CONTACT USAF ENGINEERING SPECIFICATION AND DRAWINGS BRANCH (1EWBFE), WRIGHT PATTERSON AFB, OHIO, FOR COPIES OF THE QPL SUMMARY PROVISIONS GOVERNING APPLICATION FOR MILITARY QUALIFIED PRODUCTS LISTS AND THE SPECIFICATION FOR THE PRODUCT WHICH THEY MAY WISH TO QUALIFY. ( ITALICS SUPPLIED.)

THE ADMINISTRATIVE REPORT INDICATES THAT THE PROCURING AGENCY WAS ADVISED "SHORTLY AFTER" FEBRUARY 18, 1960, THAT INTERIM FEDERAL SPECIFICATION GGG- S-00620, INVOLVING A QUALIFIED PRODUCT, HAD BEEN APPROVED FOR AIR FORCE USE. IT IS CONCEDED THAT THE LOW BIDDER, WHO AS CURRENT CONTRACTOR SHOULD HAVE BEEN REGARDED AS AN INTERESTED FIRM, WAS NOT AT THAT TIME GIVEN THE NOTIFICATION REQUIRED BY THE ASPR AND AFPI PROVISIONS QUOTED ABOVE. IT IS URGED, HOWEVER, THAT SUCH FAILURE SHOULD NOT BE REGARDED AS INVALIDATING THE PROCUREMENT BECAUSE THE LOW BIDDER WAS ADVISED OF THE INTENDED PROCUREMENT AND THE NEED TO QUALIFY IN SUFFICIENT TIME PRIOR TO BID OPENING TO PERMIT QUALIFICATION ON TIME IF IT HAD EXERCISED THE "NORMAL DILIGENCE USED IN BUSINESS PRACTICES UNDER SIMILAR CIRCUMSTANCES.'

THE ADMINISTRATIVE RECORD INDICATES THAT THE NORMAL TIME FOR QUALIFYING A PRODUCT UNDER THE SPECIFICATION IS 60 TO 90 DAYS BUT THAT THE PERIOD "MIGHT" BE SHORTENED TO 30 TO 60 DAYS BY SPECIAL HANDLING IF "ALL PHASES OF THE PROCESS WERE COMPLETELY SATISFACTORY.' THE RECORD FURTHER SHOWS THAT A REPRESENTATIVE OF THE LOW BIDDER WAS ADVISED ON OR ABOUT MAY 13, 1960, THAT A NEW SPECIFICATION REQUIRING QUALIFICATION OF PRODUCTS HAD BEEN PUBLISHED AND THAT AN INVITATION FOR BIDS INCORPORATING THE SPECIFICATION WOULD BE ISSUED SOON THEREAFTER IF APPLICABLE TO AIR FORCE USE. IN OUR VIEW THIS NOTIFICATION CANNOT BE REGARDED AS AN ACCEPTABLE SUBSTITUTE FOR THE REQUIREMENTS IMPOSED BY THE QUOTED REGULATORY MATERIAL SINCE IT INDICATED ONLY THE POSSIBILITY THAT THE SPECIFICATION WOULD BE EMPLOYED AND SINCE IT WAS NOT ACCOMPANIED BY THE NAME AND ADDRESS OF THE OFFICE TO WHICH THE REQUEST FOR QUALIFICATION SHOULD BE SUBMITTED. THE RECORD FURTHER SHOWS THAT THE SAME REPRESENTATIVE OF THE LOW BIDDER WAS CONTACTED ON OR ABOUT JUNE 14, 1960 (LESS THAN 35 DAYS PRIOR TO THE DEADLINE FOR QUALIFICATION), AND ADVISED THAT THE FIRM SHOULD MAKE EFFORTS TO QUALIFY ITS PRODUCT FOR THE INSTANT PROCUREMENT AND TO CONTACT THE DEPARTMENT OF THE NAVY IN WASHINGTON TO ARRANGE FOR QUALIFICATION TESTING. THE INFORMATION WITH REGARD TO THE ACTIVITY TO BE CONTACTED APPEARS TO BE SOMEWHAT LESS THAN CONTEMPLATED BY THE TERMS OF THE REGULATIONS. THE EFFECT OF THE DEFICIENCY, HOWEVER, NEED NOT BE CONSIDERED AT THIS TIME.

ACCEPTING THE SUFFICIENCY OF THE LAST-CITED NOTIFICATION, IT IS OUR VIEW, BASED ON THE FACTS PRESENTED IN THE ADMINISTRATIVE RECORD, THAT EVEN HAD THE LOW BIDDER GONE FORWARD WITH HIS ATTEMPTS AT QUALIFICATION FROM THAT TIME WITH THE UTMOST EFFICIENCY AND DISPATCH, THE POSSIBILITY OF MEETING THE DEADLINE WAS REMOTE. SUCCESS WOULD HAVE BEEN DEPENDENT NOT ONLY UPON UNUSUAL EFFORTS BY THE TESTING AGENCY, BUT ALSO UPON ALL PHASES OF THE PROCESS BEING COMPLETELY SATISFACTORY, WHICH, WE GATHER, WOULD IMPOSE A MUCH HIGHER STANDARD UPON THE LOW BIDDER THAN ON THOSE PROSPECTIVE SUPPLIERS WHO WERE NOTIFIED AT THE TIME AND IN THE MANNER CONTEMPLATED BY THE REGULATIONS. EVEN THEN, THE LOW BIDDER COULD COMPETE ONLY IF THE QUALIFICATION PROCESS COULD BE COMPLETED WITHIN THE FIRST FEW DAYS OF A PERIOD DESCRIBED AS MINIMAL AND PUT FORTH ONLY RELUCTANTLY AND CONDITIONALLY BY THE TESTING AGENCY.

THE FAILURE TO CONFORM TO THE MATERIAL REQUIREMENTS OF REGULATIONS SUCH AS THOSE UNDER CONSIDERATION, WHICH ARE PROMULGATED PURSUANT TO LAW AND ARE DESIGNED TO OBTAIN FOR THE UNITED STATES THE BENEFITS OF FULL AND FREE COMPETITION IN THE PROCUREMENT OF SUPPLIES AND SERVICES, GENERALLY RENDERS THE INVITATION FOR BIDS INVALID. WE AGREE THAT THE RULE MAY NOT BE APPLICABLE IN INSTANCES WHERE THE FAILURE CANNOT REASONABLY BE SAID TO HAVE RESULTED IN THE EVIL WHICH THE REGULATIONS WERE DESIGNED TO PREVENT, THE LIMITING OF COMPETITION. IN THIS CASE WE SEE NO REASON WHY THE GENERAL RULE SHOULD NOT BE APPLIED.

WE MUST CONCLUDE ON THE BASIS OF THE RECORD BEFORE US THAT THE PROCEDURES FOLLOWED DEPRIVED THE UNITED STATES OF THE BENEFITS OF FULL AND FREE COMPETITION CONTEMPLATED BOTH BY THE REGULATIONS AND BY STATUTES. THEREFORE, NO VALID AWARD MAY BE MADE UNDER THE INVITATION.