B-150339, JAN. 28, 1963

B-150339: Jan 28, 1963

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTER DATED DECEMBER 21. THE REQUIREMENT OF THE INVOLVED VERTICAL SCALE INSTRUMENTS FOR C-141 AIRCRAFT WAS ANTICIPATED. IT WAS DECIDED TO AWARD AT LEAST TWO PRODUCT IMPROVEMENT CONTRACTS. TWO CONTRACTS WERE AWARDED IN DECEMBER 1961. ONE CONTRACT WAS AWARDED TO KOLLSMAN INSTRUMENT CORPORATION AT A FIXED PRICE OF $88. THE SECOND CONTRACT WAS AWARDED TO ECLIPSE-PIONEER DIVISION OF THE BENDIX CORPORATION AT A FIXED PRICE OF $87. AT THE TIME OF AWARD OF THESE TWO CONTRACTS IT WAS CONTEMPLATED THAT THE INSTRUMENTS WOULD BE QUALIFIED UPON SUCCESSFUL COMPLETION OF THE CONTRACTS AND BOTH CONTRACTORS WERE MADE AWARE OF THIS ASSUMPTION. IN AUGUST 1962 ACTION WAS STARTED FOR THE PROCUREMENT OF 144 VERTICAL SCALE INSTRUMENTS.

B-150339, JAN. 28, 1963

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTER DATED DECEMBER 21, 1962, FROM THE CHIEF, PROCUREMENT OPERATIONS DIVISION, DIRECTORATE, PROCUREMENT MANAGEMENT, DCS/S AND L, FILE APSPM-PO-1, FURNISHING A REPORT ON THE PROTEST OF KOLLSMAN INSTRUMENT CORPORATION AGAINST THE POSSIBLE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 33-657-63-88 ISSUED BY THE AIR FORCE SYSTEMS COMMAND, AERONAUTICAL SYSTEMS DIVISION, WRIGHT- PATTERSON AIR FORCE BASE, OHIO.

PRIOR TO MAY 1961, THE REQUIREMENT OF THE INVOLVED VERTICAL SCALE INSTRUMENTS FOR C-141 AIRCRAFT WAS ANTICIPATED. IN AN EFFORT TO INSURE ADEQUATE COMPETITION FOR THIS ITEM, IT WAS DECIDED TO AWARD AT LEAST TWO PRODUCT IMPROVEMENT CONTRACTS. AFTER ADEQUATE COMPETITION WITH ADDITIONAL SOURCES, TWO CONTRACTS WERE AWARDED IN DECEMBER 1961. ONE CONTRACT WAS AWARDED TO KOLLSMAN INSTRUMENT CORPORATION AT A FIXED PRICE OF $88,000 WITH A COMPLETION DATE OF JULY 31, 1962, LATER EXTENDED TO OCTOBER 1, 1962. THE SECOND CONTRACT WAS AWARDED TO ECLIPSE-PIONEER DIVISION OF THE BENDIX CORPORATION AT A FIXED PRICE OF $87,000 WITH A COMPLETION DATE OF APRIL 30, 1962, LATER EXTENDED TO AUGUST 1962. AT THE TIME OF AWARD OF THESE TWO CONTRACTS IT WAS CONTEMPLATED THAT THE INSTRUMENTS WOULD BE QUALIFIED UPON SUCCESSFUL COMPLETION OF THE CONTRACTS AND BOTH CONTRACTORS WERE MADE AWARE OF THIS ASSUMPTION.

IN AUGUST 1962 ACTION WAS STARTED FOR THE PROCUREMENT OF 144 VERTICAL SCALE INSTRUMENTS. SINCE BOTH KOLLSMAN AND ECLIPSE-PIONEER HAD BEEN WORKING ON THESE INSTRUMENTS SINCE DECEMBER 1961, IT APPEARED THAT BOTH WOULD BE QUALIFIED WITHIN A VERY SHORT PERIOD OF TIME. FURTHER, SINCE THE INSTRUMENTS WERE HIGHLY COMPLEX AND RELATED TO SAFETY OF FLIGHT, IT WAS DETERMINED THAT THE INTEREST OF THE GOVERNMENT REQUIRED ASSURANCE THAT THE INSTRUMENTS WERE SATISFACTORY FOR THEIR INTENDED USE. IN ORDER TO CARRY OUT THIS DETERMINATION, THE QUALIFIED PRODUCTS CLAUSE AS CONTAINED IN PARAGRAPH 1-1107.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WAS INCLUDED ON PAGE 3 OF THE SCHEDULE ATTACHED TO THE INVITATION FOR BIDS NO. 33-657-63-88 WHICH WAS ISSUED ON OCTOBER 12,1962, WITH AN OPENING DATE OF 2:00 P.M., E.S.T., NOVEMBER 13, 1962. THAT CLAUSE IS AS FOLLOWS:

"QUALIFIED PRODUCTS (SEP. 1961)

"WITH RESPECT TO PRODUCTS REQUIRING QUALIFICATION, AWARDS WILL 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 LISTS (UNPUBLISHED TO DATE), WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN INCLUDED IN THE LIST BY THAT DATE. SUPPLIERS ARE URGED TO COMMUNICATE WITH THE OFFICE DESIGNATED BELOW AND ARRANGE TO HAVE THE PRODUCTS THAT THEY PROPOSE TO OFFER TESTED FOR QUALIFICATION. SUPPLIERS HAVING PRODUCTS WHICH HAVE BEEN TESTED AND QUALIFIED BUT NOT YET LISTED ARE REQUESTED TO SUBMIT EVIDENCE OF SUCH QUALIFICATION WITH THEIR BIDS, SO THAT THEY MAY BE GIVEN NSIDERATION.'

ALTHOUGH NEITHER KOLLSMAN NOR ECLIPSE-PIONEER WAS QUALIFIED ON OCTOBER 12, 1962, THERE WAS NO OBJECTION BY EITHER FIRM TO THE REQUIREMENT FOR QUALIFICATION NOR TO THE BID OPENING DATE BECAUSE APPARENTLY AT THAT TIME NO DIFFICULTY WAS FORESEEN IN COMPLETING THE REQUIRED TESTS.

ECLIPSE-PIONEER WAS APPROVED FOR INCLUSION ON THE QUALIFIED PRODUCTS LIST ON NOVEMBER 5, 1962, OR PRIOR TO THE BID OPENING DATE. KOLLSMAN, HOWEVER, EXPERIENCED MOTOR FAILURE DIFFICULTY AND ITS FIRST INSTRUMENTS FAILED TO MEET THE ENDURANCE TEST OF 750 HOURS WITH ONLY ONE FAILURE ALLOWED DURING THIS PERIOD. CONSEQUENTLY IT HAD TO START A RETEST. WHETHER AT THAT TIME KOLLSMAN COULD STILL CONDUCT A 750-HOUR TEST PRIOR TO BID OPENING IS NOT DEFINITELY ESTABLISHED. HOWEVER, AT TIME OF BID OPENING 2 P.M., NOVEMBER 13, 1962, KOLLSMAN HAD COMPLETED ONLY 627 AND 633 HOURS OF TEST ON THE TWO SETS OF INSTRUMENTS AND THE INSTRUMENTS WERE NOT APPROVED FOR QUALIFICATION UNTIL NOVEMBER 30, 1962. THERE ARE CONFLICTING STATEMENTS IN THE RECORD AS TO THE NUMEROUS CONVERSATIONS BETWEEN GOVERNMENT REPRESENTATIVES AND REPRESENTATIVES OF KOLLSMAN PRIOR TO THE BID OPENING WITH RESPECT TO THE STATUS OF THE KOLLSMAN INSTRUMENTS. IT IS POINTED OUT IN THE REPORT OF YOUR DEPARTMENT THAT KOLLSMAN HAD NOT REQUESTED AN EXTENSION OF TIME FOR THE BID OPENING, THUS IMPLYING THAT AN EXTENSION WOULD HAVE BEEN GRANTED IF REQUESTED, SO THAT KOLLSMAN WOULD HAVE HAD TIME TO QUALIFY ITS PRODUCT BEFORE THE BIDS WERE OPENED. SINCE THE DATE OF THE REPORT KOLLSMAN HAS PRESENTED A BRIEF IN WHICH IT IS STRONGLY CONTENDED THAT IT WAS LED TO BELIEVE ITS INSTRUMENTS HAD PASSED THE QUALIFICATION TESTS OTHERWISE IT WOULD HAVE BEEN REQUESTED AN EXTENSION OF THE TIME FOR OPENING THE BIDS. WE HAVE BEEN INFORMALLY ADVISED BY A REPRESENTATIVE OF YOUR DEPARTMENT THAT, AFTER A FURTHER INVESTIGATION OF THE MATTER, IT HAS BEEN ASCERTAINED THAT THE BIDS WERE OPENED ON THE ASSUMPTION THAT BOTH BIDDERS HAD QUALIFIED THEIR PRODUCTS, THAT SUCH OPENING TOOK PLACE THROUGH ERROR, AND HAD THE ACTUAL SITUATION BEEN KNOWN, THE OPENING OF BIDS SHOULD HAVE AND WOULD HAVE BEEN POSTPONED TO PERMIT KOLLSMAN TO QUALIFY ITS PRODUCTS. TO PROCEED WITH THE AWARD UNDER THESE CIRCUMSTANCES WOULD, IN OUR OPINION, NOT ONLY BE UNFAIR TO KOLLSMAN BUT WOULD RESULT IN DEFEATING THE PRIMARY OBJECTIVE OF THE PROCEDURE EMPLOYED IN THIS CASE, NAMELY, TO SECURE COMPETITION. IN THIS CONNECTION IT MAY BE POINTED OUT THAT ASPR 1- 1109 STRESSES THE FACT THAT THE OPENING OF BIDS WHERE QUALIFICATION OF PRODUCTS IS INVOLVED SHOULD BE SO SCHEDULED AS TO ALLOW COMPLETION OF TESTS.

ALTHOUGH THE BID OF KOLLSMAN IS APPROXIMATELY $90,000 LOWER THAN THAT OF ECLIPSE-PIONEER IT IS NOT PROPER FOR ACCEPTANCE UNDER THE TERMS OF THE INVITATION BECAUSE AWARD WAS TO 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 LISTS.' THIS CASE IS SIMILAR, IN ALL MATERIAL RESPECTS, TO THAT CONSIDERED IN 40 COMP. GEN. 348 WHERE WE HELD THAT THE FAILURE OF A PROCURING AGENCY TO TAKE ACTION--- IN THE INSTANT CASE TO EXTEND THE DATE FOR OPENING OF BIDS--- TO PERMIT THE LOW BIDDER TO QUALIFY HIS PRODUCT DEPRIVED THE UNITED STATES OF THE FULL AND FREE COMPETITION CONTEMPLATED BY THE REGULATIONS AND STATUTES AND HENCE A VALID AWARD MAY NOT BE MADE UNDER THE INVITATION.