B-145743, JUL. 21, 1961

B-145743: Jul 21, 1961

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 1. THE REQUIREMENTS WERE SET FORTH IN AIR FORCE MIPR 33-604-0-5826-1061 AND NAVY MIPR 17-60 6088-WEPS. SINCE INSUFFICIENT PROCUREMENT DATA WAS AVAILABLE FOR SOLICITING OTHER FIRMS. WHICH PLAN WAS APPROVED BY THE PROCUREMENT PLANNING COMMITTEE ON DECEMBER 20. SC-36-3039-61-10449 A1 WAS ISSUED TO AIRCRAFT RADIO CORPORATION. IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION 1-1003.1 THE PROCUREMENT WAS SYNOPSIZED AND MANY FIRMS REQUESTED AND WERE FURNISHED COPIES OF THE REQUEST FOR PROPOSALS ALTHOUGH THE SYNOPSIS INDICATED THAT NEITHER SPECIFICATIONS NOR DRAWINGS WERE AVAILABLE. AIRCRAFT RADIO CORPORATION WAS THE ONLY FIRM REQUESTED TO SUBMIT A PROPOSAL.

B-145743, JUL. 21, 1961

TO RETT ELECTRONICS, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 1, AND YOUR LETTERS OF MAY 8 AND MAY 31, 1961, AND THEIR ENCLOSURES, RELATIVE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER REQUEST FOR PROPOSALS NO. SC-36-039-61-10449-A1 ISSUED DECEMBER 29, 1960, BY THE U.S. ARMY SIGNAL SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS--- TO BE OPENED JANUARY 18, 1961--- FOR FURNISHING COMPONENTS OF RADIO DIRECTION FINDER SET AN/ARN-59 FOR THE DEPARTMENTS OF THE AIR FORCE AND THE NAVY. THE REQUIREMENTS WERE SET FORTH IN AIR FORCE MIPR 33-604-0-5826-1061 AND NAVY MIPR 17-60 6088-WEPS. THE AIR FORCE MIPR SPECIFIED DEFINITE AIRCRAFT RADIO CORPORATION PART NUMBERS. THE NAVY MIPR REQUESTED THE EQUIPMENT TO BE IN ACCORDANCE WITH THE LATEST APPLICABLE SIGNAL CORPS SPECIFICATION. THE DIVISION ENGINEER RECOMMENDED THAT THE ENTIRE PROCUREMENT BE ON THE BASIS OF AIRCRAFT RADIO CORPORATION PART NUMBERS, SINCE NO SIGNAL CORPS SPECIFICATIONS HAD BEEN PREPARED. ON NOVEMBER 28, 1960, THE CONTRACTING OFFICER SUBMITTED TO THE PROCUREMENT PLANNING COMMITTEE A PLAN FOR SOLICITING A PROPOSAL FROM AIRCRAFT RADIO CORPORATION ONLY, SINCE INSUFFICIENT PROCUREMENT DATA WAS AVAILABLE FOR SOLICITING OTHER FIRMS, WHICH PLAN WAS APPROVED BY THE PROCUREMENT PLANNING COMMITTEE ON DECEMBER 20, 1960.

ON DECEMBER 29, 1960, REQUEST FOR PROPOSALS NO. SC-36-3039-61-10449 A1 WAS ISSUED TO AIRCRAFT RADIO CORPORATION. HOWEVER, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION 1-1003.1 THE PROCUREMENT WAS SYNOPSIZED AND MANY FIRMS REQUESTED AND WERE FURNISHED COPIES OF THE REQUEST FOR PROPOSALS ALTHOUGH THE SYNOPSIS INDICATED THAT NEITHER SPECIFICATIONS NOR DRAWINGS WERE AVAILABLE. PARAGRAPH 1 (D) OF TERMS AND CONDITIONS OF REQUEST FOR PROPOSALS SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO ACCEPT OTHER THAN THE LOWEST PROPOSAL AND TO REJECT ANY OR ALL PROPOSALS. AIRCRAFT RADIO CORPORATION WAS THE ONLY FIRM REQUESTED TO SUBMIT A PROPOSAL. HOWEVER, SIX PROPOSALS WERE RECEIVED, INCLUDING YOUR PROPOSAL DATED JANUARY 17, 1961, IN THE AMOUNT OF $436,639.75 (THE LOW PROPOSAL) AND A PROPOSAL BY AIRCRAFT RADIO CORPORATION IN THE AMOUNT OF $557,357.41 (THE FOURTH LOW PROPOSAL).

ACCOMPANYING AND MADE A PART OF YOUR PROPOSAL WAS YOUR LETTER OF JANUARY 17, 1961, IN WHICH IT WAS STATED:

"THIS LETTER IS PART OF OUR PROPOSAL ON THE ABOVE REFERENCED REQUEST FOR PROPOSAL. THE UNITS WHICH WE PROPOSE TO MANUFACTURE ON THE ABOVE REFERENCED REQUEST FOR PROPOSAL WILL BE MADE PHYSICALLY, MECHANICALLY AND ELECTRICALLY INTERCHANGEABLE WITH ALL UNITS, DETAILS AND COMPONENTS OF THIS EQUIPMENT AS MANUFACTURED BY THE AIRCRAFT RADIO CORP.

"WITHIN 120 DAYS AFTER DATE OF CONTRACT OR NOTICE OF AWARD, WHICHEVER COMES FIRST, RETT ELECTRONICS, INC. WILL PROVIDE THE SIGNAL CORPS WITH A COMPLETE SET OF TEST REPORTS. THESE TESTS WILL BE PERFORMED BY AN APPROVED INDEPENDENT GOVERNMENT TESTING LABORATORY. THESE TESTS WILL BE UNDER THE COMPLETE CONTROL OF THE FIELD ENGINEER ASSIGNED TO THIS CONTRACT BY THE U.S. ARMY SIGNAL SUPPLY AGENCY, IN THE EVENT THIS IS SO DESIRED.

"WITHIN 30 DAYS AFTER DATE OF THE NOTICE OF AWARD OR CONTRACT, A PROPOSED TEST SCHEDULE AND PROCEDURE WILL BE FORWARDED TO THE CONTRACTING OFFICER FOR HIS APPROVAL. THIS TEST PROCEDURE WILL ENCOMPASS BOTH ENVIRONMENTAL AND OPERATIONAL TESTING. AT THE TIME THAT THE FINAL TEST REPORT IS SUBMITTED WITHIN 120 DAYS OF NOTICE OF AWARD OR CONTRACT, WE WILL FORWARD WITH THIS REPORT A STUDY PROVING COMPLETE INTERCHANGEABILITY OF COMPONENTS, SUB-ASSEMBLIES AND END PRODUCTS. WE WILL ALSO FORWARD WITH THIS REPORT TEST DATA IN WHICH ONE OF OUR PREPRODUCTION UNITS WILL BE INSTALLED IN A HELICOPTER AND ACTUALLY OPERATED UNDER SERVICE CONDITIONS.'

IN RESPONSE TO A REQUEST DATED JANUARY 27, 1961, FOR INFORMATION AS TO WHETHER YOU POSSESSED AIRCRAFT RADIO CORPORATION COMPLETE MANUFACTURING DATA FOR THE DESIRED EQUIPMENT, YOU STATED IN YOUR REPLY OF FEBRUARY 2, 1961, THAT YOU HAD ADEQUATE TECHNICAL DATA TO MANUFACTURE THE EQUIPMENT, SUBMITTING A LIST OF INSTRUCTIONS AND TESTING EQUIPMENT IN YOUR POSSESSION, INCLUDING A COMPLETE UNIT OF THE AN/ARN-59. IN VIEW OF YOUR LETTER OF FEBRUARY 2, 1961, THE MATTER WAS SUBMITTED TO THE CONTRACTOR EVALUATION BOARD, WHICH BOARD ADVISED THE CONTRACTING OFFICER THAT THE APPLICABLE SPECIFICATION AND TECHNICAL DATA WHICH YOU PROPOSED TO USE WOULD BE NECESSARY FOR EVALUATION PURPOSES. ON MARCH 7, 1961, YOUR PLANT WAS VISITED BY THE CONTRACTING OFFICER, THE DIVISION ENGINEER OF THE U.S. ARMY SIGNAL SUPPLY AGENCY AND REPRESENTATIVES OF THE U.S. ARMY SIGNAL MATERIEL SUPPORT AGENCY. IT IS REPORTED BY THE ADMINISTRATIVE OFFICE THAT INVESTIGATION AND DISCUSSIONS WITH YOUR REPRESENTATIVES DID NOT REVEAL ANY INFORMATION WHICH WOULD BE THE BASIS OF A FIRM CONTRACT BUT THAT YOU OFFERED TO DEVELOP A TEST PROCEDURE AFTER AWARD OF A CONTRACT, SUBJECT TO GOVERNMENT APPROVAL.

ON MARCH 22, 1961, THE REQUEST FOR THE CONTRACTOR EVALUATION BOARD'S EVALUATION WAS WITHDRAWN ON THE BASIS THAT THE RESPONSIVENESS OF YOUR PROPOSAL REQUIRED FURTHER EXAMINATION. SUBSEQUENTLY IT WAS DETERMINED THAT YOUR PROPOSAL WAS NOT RESPONSIVE. IN THIS CONNECTION IT IS REPORTED THAT DIRECTION FINDER SET AN/ARN-59 HAS BEEN PROCURED FROM AIRCRAFT RADIO CORPORATION SINCE JULY 1957 AND THAT THE GOVERNMENT HAS BEEN UNABLE TO OBTAIN TECHNICAL DATA FOR COMPETITIVE SOLICITATION AND FOR EVALUATION OF A PROPOSED EQUIVALENT ITEM. IT IS REPORTED FURTHER THAT THE EQUIPMENT COVERED BY THE REQUEST FOR PROPOSAL IS REQUIRED BY THE AIR FORCE AND THE NAVY FOR MAINTENANCE FLOAT PURPOSES AND THAT NO DEVIATIONS FROM EQUIPMENT NOW IN USE WOULD BE ACCEPTABLE, SINCE THE AIRCRAFT RADIO CORPORATION PRODUCT HAS PARTICULAR FEATURES WHICH ARE ESSENTIAL IN THE INTEREST OF FUNCTIONING AND INTERCHANGEABILITY. IT IS REPORTED ALSO THAT YOUR CORPORATION PROPOSED TO REVERSE ENGINEER AN AIRCRAFT RADIO CORPORATION PRODUCT AND SO DEVELOP SPECIFICATIONS AND TEST PROCEDURES BY COMPARISON AND ENGINEERING DEDUCTION.

THE SECOND AND THIRD LOW BIDS WERE DETERMINED TO BE NONRESPONSIVE AS THEY OFFERED ALTERNATE ITEMS. NEGOTIATIONS WITH THE AIRCRAFT RADIO CORPORATION RESULTED IN REDUCING ITS PRICE TO $539,578.71. ON APRIL 24, 1961, THE DEPUTY FOR PROCUREMENT, U.S. ARMY SIGNAL SUPPLY AGENCY, APPROVED THE CONTRACTING OFFICER'S RECOMMENDATION THAT THE FIRST, SECOND AND THIRD LOW BIDS BE REJECTED AND ON APRIL 28, 1961, AWARD WAS MADE TO AIRCRAFT RADIO CORPORATION.

IT IS WELL ESTABLISHED THAT THE DRAFTING OF SPECIFICATIONS DESIGNED TO MEET THE MINIMUM NEEDS OF THE GOVERNMENT AND THE DETERMINATION AS TO WHETHER THE BIDS RECEIVED ARE RESPONSIVE TO SUCH SPECIFICATIONS ARE PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE OFFICE REQUIRING THE MATERIAL, EQUIPMENT OR SERVICES. 21 COMP. GEN. 1132, 1136. IN THE INSTANT MATTER, THE ADMINISTRATIVE OFFICE DETERMINED THAT ONLY THE EQUIPMENT MANUFACTURED BY AIRCRAFT RADIO CORPORATION WOULD MEET THE MINIMUM NEEDS OF THE AIR FORCE AND THE NAVY. THE INFORMATION INCLUDED IN THE FILE INDICATES THAT SUCH DETERMINATION WAS MADE AFTER HONEST AND PERSISTENT EFFORTS BY THE ADMINISTRATIVE OFFICERS AT VARIOUS LEVELS TO DETERMINE WHETHER THE EQUIPMENT OFFERED BY YOU WOULD IN FACT MEET THE NEEDS OF THE GOVERNMENT AND WHETHER THE REVERSE ENGINEERING, TESTING AND FURNISHING OF SUITABLE EQUIPMENT COULD BE ACCOMPLISHED SATISFACTORILY AND WITHIN THE TIME FIXED IN THE REQUEST FOR PROPOSALS. IT IS OUR VIEW THAT THE DETERMINATION AS MADE RESTS ON A REASONABLE BASIS, PARTICULARLY IN VIEW OF THE FACT THAT THE EQUIPMENT COVERED BY THE REQUEST FOR PROPOSALS WAS INTENDED FOR USE IN REPLACING AND MAINTAINING AIRCRAFT RADIO CORPORATION EQUIPMENT THEN INSTALLED AND IN USE. IT APPEARS TO BE SATISFACTORILY ESTABLISHED THAT THE TECHNICAL INFORMATION IN THE POSSESSION OF THE ADMINISTRATIVE OFFICE WAS INADEQUATE FOR USE IN A COMPETITIVE PROCUREMENT.

IN THE MATTER OF NEGOTIATED PROCUREMENTS, THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING DO NOT APPLY AND THE TERMS AND CONDITIONS UPON WHICH PROPOSALS ARE REQUESTED AND THE SELECTION OF CONTRACTORS ARE DETERMINED ARE MATTERS FOR THE ADMINISTRATIVE OFFICE CONCERNED IN THE EXERCISE OF ITS BEST JUDGMENT AS TO THE INTERESTS OF THE GOVERNMENT.

THE CONTRACTING AGENCY HAS DETERMINED THAT THE AWARD TO AIRCRAFT RADIO CORPORATION WAS PROPER, SINCE IT WAS THE LOWEST BIDDER DEFINITELY MEETING ALL OF THE REQUIREMENTS OF THE REQUEST FOR PROPOSALS. IN VIEW OF THE WIDE DISCRETION VESTED IN ADMINISTRATIVE OFFICIALS IN NEGOTIATED PROCUREMENTS AND SINCE IT IS NOT SHOWN THAT THESE OFFICIALS FAILED TO EXERCISE THEIR BEST JUDGMENT IN MAKING THE AWARD, THERE IS NOT FOUND ANY VALID GROUND FOR OBJECTION BY OUR OFFICE TO THE AWARD AS MADE.

IN YOUR LETTER OF MAY 8, 1961, YOU STATE THAT "A LETTER GUARANTEEING PERFORMANCE OF THIS CONTRACT BY JACK AND HEINTZ, A DIVISION OF THE SIEGLER CORPORATION, THE PARENT COMPANY OF RETT ELECTRONICS, INC. WAS FORWARDED TO THE U.S. ARMY SIGNAL SUPPLY AGENCY SIGNED BY AN OFFICER OF JACK AND HEINTZ.' THE ADMINISTRATIVE OFFICE REPORTS THAT THE LETTER FROM JACK AND HEINTZ MERELY GUARANTEED FINANCIAL AID AS REQUIRED.

WITH REFERENCE TO THE STATEMENT IN YOUR LETTER THAT YOU SUPPLIED THE SIGNAL CORPS WITH THE NAMES OF PEOPLE WITHIN THE SIEGLER CORPORATION "WHO HAD EXPERIENCE WITH THIS VERY EQUIPMENT UNDER DISCUSSION" IT IS REPORTED THAT THE PROCUREMENT FILE DOES NOT INDICATE ANY INDIVIDUAL WITH SPECIFIC EXPERIENCE WITH THE AN/ARN-59, THOUGH REFERRING TO THREE EMPLOYEES OF JACK AND HEINTZ HAVING BACKGROUND KNOWLEDGE IN THE GENERAL FIELD OF RADIO DIRECTION FINDERS.

THE CONTRACTING OFFICER STATES THAT THE TELEGRAM CLOSING NEGOTIATION WAS NOT SENT TO YOU AFTER AWARD AS STATED IN YOUR LETTER BUT WAS SENT APRIL 27 AND THAT THE LETTER NOTIFYING UNSUCCESSFUL OFFERORS WAS MAILED APRIL 28--- THE DATE OF THE AWARD.

WITH REFERENCE TO THE CONFERENCE OF YOUR MR. MINOWITZ WITH THE CONTRACTING OFFICER ARRANGED FOR MAY 3, IT IS REPORTED THAT WHEN THE CONFERENCE WAS ARRANGED BY TELEPHONE ON MAY 1, NO SPECIFIC REASON FOR THE CONFERENCE WAS GIVEN AND THE CONTRACTING OFFICER ASSUMED THAT YOU DESIRED TO DISCUSS THE RECENT AWARD, NOTICE OF WHICH AWARD HAD BEEN MAILED TO YOU ON APRIL 28. IT IS REPORTED FURTHER THAT MR. MINOWITZ DID NOT APPEAR FOR THE CONFERENCE.

IN YOUR LETTER OF MAY 8 IT IS STATED IN SUBSTANCE THAT THE PERIOD OF FOUR MONTHS WHICH ELAPSED FROM THE CLOSING OF BIDS TO THE DATE OF AWARD INDICATES A LACK OF URGENCY AND THAT THE GOVERNMENT WOULD HAVE HAD ADEQUATE TIME TO EVALUATE YOUR TESTING PROGRAM AND YOUR PREPRODUCTION SAMPLES. THE ADMINISTRATIVE OFFICE STATES THAT THE LENGTH OF TIME USED IN EVALUATING THE SEVERAL PROPOSALS WAS NECESSARY AND THAT THE CONTRACT NEGOTIATED WITH AIRCRAFT RADIO CORPORATION REQUIRES DELIVERY TO START 90 DAYS AFTER DATE OF NOTIFICATION OF AWARD AND TO BE COMPLETED WITHIN 210 DAYS AFTER DATE OF NOTIFICATION, THUS PROVIDING FOR DELIVERY AT APPROXIMATELY THE SAME TIME AS IF AWARD HAD BEEN MADE UNDER THE TERMS OF THE REQUEST FOR PROPOSALS IMMEDIATELY AFTER THE OPENING OF PROPOSALS. ATTENTION IS ALSO INVITED TO THE FACT THAT THE TESTING PROGRAM OFFERED BY YOU WAS TO BE SUBMITTED "WITHIN 120 DAYS AFTER DATE OF CONTRACT OR NOTICE OF AWARD, WHICHEVER COMES FIRST.'

AS SUGGESTED IN YOUR LETTER OF MAY 31, 1961, OUR OFFICE HAS BEEN CONCERNED WITH CERTAIN PROCUREMENT PROBLEMS, INCLUDING THE NUMBER AND DOLLAR AMOUNT OF PROCUREMENTS ACCOMPLISHED WITHOUT FORMAL ADVERTISING AND THE WEAKNESSES NOTICED WITH RESPECT TO CONTRACT NEGOTIATION PROCEDURES AND PRACTICES. IT IS OUR VIEW THAT FORMAL ADVERTISING SHOULD BE USED WHEREVER FEASIBLE AND PRACTICABLE AND THAT PROCUREMENT FROM SOLE SOURCES GENERALLY INCREASES THE COST TO THE GOVERNMENT. HOWEVER, THE ARMED SERVICES PROCUREMENT ACT AUTHORIZES NEGOTIATION ON A SOLE SOURCE BASIS UNDER CERTAIN CONDITIONS AND IT IS BELIEVED THAT SUCH CONDITIONS EXISTED IN THE INSTANT MATTER, SINCE IT WAS DETERMINED THAT AIRCRAFT RADIO CORPORATION EQUIPMENT WAS REQUIRED AND THE PROCUREMENT OFFICE HAD BEEN UNABLE TO OBTAIN THE DATA NECESSARY FOR COMPETITIVE BUYING.

FOR THE REASONS ABOVE SET FORTH, THERE APPEARS NO LEGAL BASIS FOR OBJECTION BY OUR OFFICE TO ..END :