B-144452, DECEMBER 9, 1960, 40 COMP. GEN. 352

B-144452: Dec 9, 1960

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CONTRACTS - BIDS - QUALIFIED PRODUCT LIST ITEMS - READVERTISEMENT THE READVERTISEMENT OF A PROCUREMENT INVOLVING A QUALIFIED PRODUCT LIST ITEM ON REVISED SPECIFICATIONS WHICH RELAXED CERTAIN TESTING REQUIREMENTS FOR THE PRODUCT AFTER AN ADMINISTRATIVE DETERMINATION THAT ONE OF THE BIDDER'S PRODUCTS HAD BEEN PERMITTED TO QUALIFY ON THE BASIS OF LESS EXACTING TESTING METHODS THAN THOSE PRESCRIBED IN THE INVITATION IS A PROPER ADMINISTRATIVE ACTION AND. EVEN THOUGH THERE WAS A DISCLOSURE OF PRICES. A READVERTISEMENT OF THE PROCUREMENT IS LESS UNDESIRABLE THAN THE ACCEPTANCE OF THE LOW BID ON A BASIS ON WHICH THE OTHER BIDDER WHO MET THE SPECIFICATIONS HAD NO OPPORTUNITY TO BID OR THE ACCEPTANCE OF THE HIGHER BID DESPITE THE QUALIFICATION APPROVAL OF THE LOW BIDDER'S PRODUCT.

B-144452, DECEMBER 9, 1960, 40 COMP. GEN. 352

CONTRACTS - BIDS - QUALIFIED PRODUCT LIST ITEMS - READVERTISEMENT THE READVERTISEMENT OF A PROCUREMENT INVOLVING A QUALIFIED PRODUCT LIST ITEM ON REVISED SPECIFICATIONS WHICH RELAXED CERTAIN TESTING REQUIREMENTS FOR THE PRODUCT AFTER AN ADMINISTRATIVE DETERMINATION THAT ONE OF THE BIDDER'S PRODUCTS HAD BEEN PERMITTED TO QUALIFY ON THE BASIS OF LESS EXACTING TESTING METHODS THAN THOSE PRESCRIBED IN THE INVITATION IS A PROPER ADMINISTRATIVE ACTION AND, EVEN THOUGH THERE WAS A DISCLOSURE OF PRICES, A READVERTISEMENT OF THE PROCUREMENT IS LESS UNDESIRABLE THAN THE ACCEPTANCE OF THE LOW BID ON A BASIS ON WHICH THE OTHER BIDDER WHO MET THE SPECIFICATIONS HAD NO OPPORTUNITY TO BID OR THE ACCEPTANCE OF THE HIGHER BID DESPITE THE QUALIFICATION APPROVAL OF THE LOW BIDDER'S PRODUCT.

TO ROBERT SHERIFFS MOSS, DECEMBER 9, 1960:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 15, 1960, WRITTEN IN BEHALF OF LEAR, INCORPORATED, AND PROTESTING AGAINST THE ACTION OF AIR MATERIAL COMMAND IN REJECTING ALL BIDS RECEIVED UNDER IFB 33-600-61-34 AND READVERTISING FOR NEW BIDS ON THE SAME ITEMS UNDER AMENDED SPECIFICATIONS.

THE INVITATION IN QUESTION WAS ISSUED ON AUGUST 11, 1960, AND, AS AMENDED, CALLED FOR BIDS ON 2,099 GYROSCOPES. IT ADVISED BIDDERS THAT, WITH RESPECT TO PRODUCTS REQUIRING ALIFICATION,"AWARDS WOULD BE MADE ONLY FOR SUCH PRODUCTS THAT HAVE, PRIOR TO TIME SET FOR OPENING OF BIDS, BEEN TESTED AND QUALIFY FOR INCLUSION IN THE QUALIFIED PRODUCTS LIST (UNPUBLISHED TO DATE), WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN INCLUDED BY THAT DATE.' THE INVITATION ALSO ADVISED BIDDERS THAT ITEMS 1.1 THROUGH 1.23 REQUIRED QUALIFICATION AND DESCRIBED THE VARIOUS LOTS OF GYROSCOPES UNDER THESE ITEMS AS FOLLOWS:

CHART

GYROSCOPE, RATE, SWITCHING, TYPE MC-1 IN ACCORDANCE WITH SPECIFICATION MIL-G-25591A ( USAF) DATED JULY 1957 AND AMENDMENT NO. 1 THERETO DATED 1 JULY 1958. AERNO NO. 60-5938 (B-52H, USAF INSTALLATIONS, FY 61) CONTRACTOR'S PART NO. -------------------------- ---------------------- FEDERAL STOCK NO. ------------------------------ ----------------------

THE BASIC MILITARY SPECIFICATION (MIL-G-25591A) IN QUESTION SETS FORTH THE REQUIREMENTS, COMPONENT PARTS, MATERIALS, DESIGN, CONSTRUCTION, PERFORMANCE STANDARDS, DIMENSIONS, TOLERANCES AND WORKMANSHIP FOR THE PRODUCT, AS WELL AS THE TEST METHODS THAT THE PRODUCT HAS TO BE SUBJECTED TO BEFORE APPROVAL AND ACCEPTANCE BY THE GOVERNMENT. IN ADDITION, IT PROVIDES THAT THE TESTS FOR APPROVAL AND INCLUSION OF THE PRODUCT IN THE QUALIFIED PRODUCTS LIST SHALL CONSIST OF ALL THE TESTS SPECIFIED IN PARAGRAPH 4.5, TEST METHODS, OF THE SPECIFICATIONS.

AMENDMENT NO. 1 TO THE BASIC MILITARY SPECIFICATION WAS ISSUED ON JULY 1, 1958. IT MADE A NUMBER OF MINOR CHANGES IN THE REQUIREMENTS PERTAINING TO MATERIALS, DESIGN, CONSTRUCTION AND TESTING. AMENDMENT NO. 2 WAS ISSUED ON JULY 13, 1960. IT INCORPORATED THE IDENTICAL CHANGES MADE BY AMENDMENT NO. 1 AND ADDED THERETO ONE CHANGE WHICH ALLOWED A RELAXATION IN THE WEIGHT OF THE PRODUCT FROM 1 1/2 POUNDS TO 1.6 POUNDS. HOWEVER, NO MENTION OF AMENDMENT NO. 2 WAS INCLUDED IN IFB 33-600-61-34.

THE PRODUCT OF LEAR, INCORPORATED, WAS QUALIFIED ON MARCH 23, 1960. HOWEVER, IT APPEARS THAT THE QUALIFICATION TESTS AND STANDARDS TO WHICH THIS PRODUCT WAS SUBJECTED WERE NOT IDENTICAL WITH THOSE SET OUT IN PARAGRAPH 4.5, TEST METHODS, OF SPECIFICATION MIL-G-25591A AND AMENDMENT NO. 1 DATED JULY 1, 1958, WHICH WAS IN EFFECT ON THE DATE OF QUALIFICATION. THUS, DEVIATIONS IN THESE TESTS AND STANDARDS WERE PERMITTED IN THE SWITCHING RATE BY ALLOWING THE LEAR PRODUCT FOUR SECONDS TO RECOVER AT A 180 DEGREE RATE OF TURN, RATHER THAN THE THREE SECONDS REQUIRED BY PARAGRAPH 4.5.2 OF THE SPECIFICATION, WHICH LATTER REQUIREMENT LEAR PERSONNEL HAVE ADMITTED THE PRODUCT THEY WERE THEN FURNISHING THE AIR FORCE UNDER CONTRACT NO. AF 33/600/-39893 COULD NOT MEET WITHOUT EXTENSIVE REDESIGNING. FURTHER DEVIATIONS WERE PERMITTED IN THE HIGH TEMPERATURE OPERATION REQUIREMENTS UNDER PARAGRAPH 4.5.11.1. NONE OF THESE DEVIATIONS WAS INCORPORATED IN AMENDMENTS TO THE SPECIFICATIONS UNTIL OCTOBER 31, 1960. THE BENDIX PRODUCT WAS QUALIFIED ON MAY 16, 1960, IN ACCORDANCE WITH THE TEST METHODS AND STANDARDS SET OUT IN PARAGRAPH 4.5 OF THE SPECIFICATION. BY LETTER TO THIS OFFICE DATED DECEMBER 1, 1960, BENDIX HAS ALLEGED IT HAD NO KNOWLEDGE OF THE DEVIATIONS GRANTED ON THE LEAR PRODUCT WHEN THE BENDIX BID ON IFB 33-600-61-34 WAS SUBMITTED ON SEPTEMBER 20, 1960.

THE QUALIFIED PRODUCTS LIST WAS ISSUED ON JULY 14, 1960, LISTING ONLY THE LEAR AND BENDIX PRODUCTS AND STATING THAT "ALL PRODUCTS LISTED HEREIN HAVE BEEN QUALIFIED UNDER THE REQUIREMENTS FOR THE PRODUCT AS SPECIFIED IN THIS LATEST EFFECTIVE ISSUE OF THE APPLICABLE SPECIFICATION.'

AS INDICATED ABOVE, IFB 33-600-61-34 WAS ISSUED ON AUGUST 11, 1960, AFTER BOTH PRODUCTS HAD BEEN QUALIFIED AND AFTER THE DATE OF AMENDMENT NO. 2 TO THE SPECIFICATIONS.

BIDS WERE RECEIVED FROM BOTH LEAR AND BENDIX. THE BID BY BENDIX WAS $489.40 PER UNIT; THE BID BY LEAR, INCORPORATED, WAS $484.75 EACH. THE BID BY BENDIX CONTAINED NO QUALIFICATIONS AS TO THE SPECIFICATIONS. LEAR QUALIFIED ITS BID BY STATING THAT THE BASIC ITEMS "WILL BE PRODUCED IN ACCORDANCE WITH MIL-G-25591A DATED JULY 9, 1957, AMENDMENT NO. 1 DATED JULY 1, 1958, AND CHANGES PREVIOUSLY AUTHORIZED UNDER AF 33/600/-39893.' LEAR ATTACHED COPIES OF THE CHANGES PREVIOUSLY AUTHORIZED WHICH CORRESPOND TO THE DEVIATIONS UNDER WHICH ITS PRODUCT WAS QUALIFIED. BY LETTERS DATED OCTOBER 26 AND NOVEMBER 1, 1960, BENDIX STATED THAT IT WISHED TO CLARIFY A POINT WHICH WAS UNDER DISCUSSION IN CONNECTION WITH THE TECHNICAL REQUIREMENTS OF THE IFB. BENDIX STATED THAT IT HAD BID IN ACCORDANCE WITH THE REQUIREMENTS OF THE SPECIFICATIONS AS SET FORTH IN THE IFB AND THAT WHILE IT HAD PREVIOUSLY MADE A PRODUCT IMPROVEMENT WHICH INCREASED THE WEIGHT OF THE ITEM BY 10.1 POUND (WHICH INCREASE WAS RECOGNIZED IN AMENDMENT NO. 2 TO THE BASIC SPECIFICATION) ITS ITEM WAS QUALIFIED WITHOUT THIS CHANGE AND THAT IT WAS BIDDING STRICTLY IN ACCORDANCE WITH THE TERMS OF THE IFB WHICH ONLY REQUIRED AN ITEM IN ACCORDANCE WITH THE BASIC SPECIFICATION AND AMENDMENT NO. 1.

UPON REVIEW OF THE BIDS, THE AMC AERONAUTICAL SYSTEM CENTER DETERMINED THAT IT WAS IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT ALL BIDS AND READVERTISE THE PROCUREMENT UNDER REVISED SPECIFICATIONS. THE REASONING LEADING TO THIS CONCLUSION WAS THAT THE LEAR BID WAS NOT RESPONSIVE, BECAUSE THE QUALIFICATIONS STATED THEREIN WERE NOT IN ACCORDANCE WITH THE DEFINITE REQUIREMENTS OF THE SPECIFICATIONS SPECIFICALLY REFERENCED IN THE INVITATION, AND THAT THE BENDIX BID, WHILE MEETING THE INVITATION REQUIREMENTS, DID NOT OFFER THE IMPROVEMENT WHICH HAD LED TO AMENDMENT NO. 2, ALTHOUGH IT WAS BELIEVED THAT THE GOVERNMENT'S NEEDS WOULD BE BETTER SERVED THEREBY.

ON OCTOBER 31, 1960, AMENDMENT NO. 3 TO THE ORIGINAL SPECIFICATION WAS ISSUED, WHICH INCORPORATED THE CHANGES MADE BY AMENDMENT NO. 1, THE WEIGHT INCREASE AUTHORIZED BY AMENDMENT NO. 2, AND THE MODIFICATIONS OF THE TESTING REQUIREMENTS UNDER WHICH THE LEAR GYROSCOPE HAD BEEN GRANTED QUALIFICATION AND ON WHICH ITS BID ON THE ORIGINAL INVITATION WAS BASED. ON NOVEMBER 8, 1960, A NEW INVITATION WAS ISSUED. THE READVERTISEMENT CALLS FOR GYROSCOPES IN ACCORDANCE WITH SPECIFICATION MIL-G-25591A ( USAF) AND AMENDMENT NO. E THERETO, DATED OCTOBER 31, 1960, AND WE ARE ADVISED BOTH BIDDERS HAVE BEEN INFORMED THAT THE QUALIFICATION APPROVAL PREVIOUSLY GRANTED THEM IN QPL LIST 25591-2, DATED JULY 11, 1960, WILL BE EXTENDED TO THE CHANGES MADE BY AMENDMENT NO. 3 WITHOUT FURTHER QUALIFICATION TESTING.

YOUR PROTEST AGAINST THE REJECTION OF BIDS UNDER IFB 33-600-61-34 IS BASED UPON YOUR BELIEF THAT LEAR'S BID WAS RESPONSIVE TO THE INVITATION, AND THAT THE SPECIFICATIONS WERE ADEQUATE SINCE THE PRODUCT OF EACH BIDDER HAD BEEN APPROVED FOR THE QUALIFIED PRODUCTS LIST AND EACH BIDDER WAS BIDDING UPON THE PRODUCT SO APPROVED. IT IS YOUR FURTHER CONTENTION THAT THE SPECIFICATIONS UNDER IFB 33-600-61-34 CANNOT BE CLASSED AS AMBIGUOUS, SINCE EACH BIDDER UNDER A NEW INVITATION INCORPORATING AMENDMENT NO. 3 WILL BE BIDDING ON THE IDENTICAL QUALIFIED PRODUCT HE OFFERED UNDER THE PREVIOUS INVITATION. YOU EXPRESS THE OPINION THAT THE UNNECESSARY EXPOSURE OF BOTH BIDS RESULTING FROM THEIR REJECTION WOULD TEND TO DAMAGE THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, AND THAT READVERTISEMENT WILL CONVERT THE PROCUREMENT INTO AN AUCTION. YOU THEREFORE REQUEST THIS OFFICE TO DIRECT THE AIR FORCE TO CANCEL THE NEW INVITATION FOR BIDS AND MAKE AN AWARD TO THE LOWEST RESPONSIVE BIDDER UNDER IFB 33-600-61-34.

ON THE RECORD WE AGREE WITH THE VIEW OF THE ADMINISTRATIVE AGENCY THAT THE LEAR BID WAS QUALIFIED BY THE REFERENCE TO THE CHANGES INCORPORATED IN ITS PRIOR CONTRACT, WHICH CLEARLY DEVIATED FROM THE REQUIREMENTS OF THE SPECIFICATIONS CITED IN THE INVITATION. EVEN THOUGH THE LEAR PRODUCT HAS BEEN LISTED ON THE QPL, THE INVITATION WAS BASED UPON SPECIFICATIONS WHICH IT ADMITTEDLY HAD NOT MET, AND WE BELIEVE THAT A BIDDER WHO RECEIVES AN AWARD UNDER SUCH AN IFB IS BOUND BY THE REQUIREMENTS SET OUT IN THE SPECIFICATIONS INCORPORATED INTO THE IFB, IRRESPECTIVE OF WHETHER SUCH REQUIREMENTS ARE LESS OR GREATER THAN THOSE MET IN QUALIFYING HIS PRODUCT. SEE, IN THIS CONNECTION, THE ADVICE THAT QUALIFICATION OF A PRODUCT "DOES NOT CONSTITUTE A WAIVER OF THE REQUIREMENTS OF THE SPECIFICATION AS TO ACCEPTANCE, INSPECTION, TESTING OR OTHER PROVISIONS OF ANY CONTRACT INVOLVING SUCH PRODUCT" WHICH WAS INCLUDED IN THE MARCH 23, 1960, QUALIFICATION NOTICE TO LEAR, AS REQUIRED BY ASPR 1-1103.3.

FURTHERMORE, SINCE BENDIX HAD NO NOTICE OF THE CHANGED TESTING REQUIREMENTS ON WHICH THE LEAR BID WAS BASED, BUT WAS BIDDING ON THE BASIS OF THE REQUIREMENTS SPECIFIED IN THE INVITATION, CONSIDERATION OF THE LEAR BID ON THE BASIS OF ITS INCLUSION ON THE QPL WITHOUT FURTHER REFERENCE TO THE SPECIFICATIONS WOULD HAVE BEEN UNFAIR TO BENDIX AND WOULD HAVE CONSTITUTED EVALUATION OF THE BIDS ON A COMMON BASIS.

AS INDICATED ABOVE, IT IS OUR UNDERSTANDING FROM DISCUSSIONS WITH YOU AND WITH LEAR PERSONNEL THAT THE LEAR PRODUCT WAS UNABLE TO MEET THE THREE SECOND RECOVERY REQUIREMENT OF PARAGRAPH 4.5.2 OF THE SPECIFICATION, AND THAT EXTENSIVE REDESIGNING OF THE PRODUCT WOULD BE NECESSARY IF SUCH REQUIREMENT WERE TO BE MET. THE PRODUCT WAS THEREFORE PERMITTED TO BE QUALIFIED UNDER A RELAXED RECOVERY RATE OF FOUR SECONDS, BUT THIS RELAXATION WAS NEVER INCORPORATED INTO THE SPECIFICATIONS UNTIL OCTOBER 31, 1960, ALTHOUGH WE HAVE BEEN INFORMALLY ADVISED THAT A LETTER WAS WRITTEN TO LEAR AT THE TIME OF ITS QUALIFICATION APPROVAL STATING THAT THE SPECIFICATIONS WOULD BE MODIFIED IN THAT RESPECT.

HAVING PROPERLY CONCLUDED THAT THE LEAR BID WAS NONRESPONSIVE, THE PROCURING AGENCY WAS FACED WITH THE CHOICE OF ACCEPTING THE BENDIX BID, WHICH WAS STRICTLY IN ACCORDANCE WITH THE INVITATION, OR READVERTISING UNDER REVISED SPECIFICATIONS WHICH WOULD EMBODY THE REVISED TEST REQUIREMENTS UNDER WHICH THE LEAR GYROSCOPE HAD BEEN QUALIFIED AND ALSO PERMIT BENDIX TO FURNISH THE IMPROVEMENT WHICH WAS PERMISSIBLE UNDER AMENDMENT NO. 2 TO THE SPECIFICATION BUT NOT UNDER THE SPECIFICATIONS CITED IN THE INVITATION.

IN VIEW OF THE PECULIAR CIRCUMSTANCES OF THIS CASE, RESULTING PRINCIPALLY FROM THE UNFORTUNATE ACCEPTANCE ON THE GPL OF AN ARTICLE WHICH ADMITTEDLY COULD NOT MEET THE APPLICABLE SPECIFICATIONS THEREFORE, AND CONSIDERING ALSO THE WELL-ESTABLISHED PROPOSITION THAT THE REJECTION OF BIDS AFTER OPENING IS A MATTER INVOLVING THE EXERCISE OF SOUND ADMINISTRATIVE DISCRETION, WITH WHICH OUR OFFICE WILL NOT INTERFERE EXCEPT IN CASE OF CLEARLY ARBITRARY ACTION, WE HAVE NO DIFFICULTY IN ACCEPTING THE ADMINISTRATIVE DECISION. THE DISCLOSURE OF THE PRICES BID IS A REGRETTABLE INCIDENT OF SUCH ACTION, WHICH SHOULD BE AVOIDED WHEREVER POSSIBLE, BUT IN THIS INSTANCE WE VIEW THIS CONSEQUENCE AS LESS UNDESIRABLE THAN WOULD BE THE ACCEPTANCE OF THE LEAR BID, ON A BASIS ON WHICH BENDIX HAD NO OPPORTUNITY TO BID, OR THE ACCEPTANCE OF THE HIGHER BENDIX BID DESPITE THE QUALIFICATION APPROVAL OF THE LEAR PRODUCT.