B-150756, MAY 9, 1963

B-150756: May 9, 1963

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TO KOEHRING COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 30. THE REPORT FURNISHED BY THE DEPARTMENT OF THE ARMY SHOWS THAT THE PROCUREMENT WAS AWARDED TO THE CHAIN BELT COMPANY ON MODEL NO. THAT STANDARDIZATION OF SUCH EQUIPMENT AND INTERCHANGEABILITY OF ITS PARTS ARE NECESSARY IN THE PUBLIC INTEREST. THAT THE PROCUREMENT OF SUCH EQUIPMENT OR OF ITS PARTS BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY. PURSUANT TO 10 U.S.C. 2310 SUCH A DETERMINATION IS FINAL. THE AWARD WAS MADE TO THE CHAIN BELT COMPANY AFTER NEGOTIATIONS. FOR EQUIPMENT THAT HE (THE SECRETARY) DETERMINES TO BE TECHNICAL EQUIPMENT WHOSE STANDARDIZATION AND THE INTERCHANGEABILITY OF WHOSE PARTS ARE NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY.'.

B-150756, MAY 9, 1963

TO KOEHRING COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 30, 1963, PROTESTING THE PURCHASE BY NEGOTIATION OF A QUANTITY OF CONCRETE MIXERS, GASOLINE ENGINE DRIVEN, TRAILER MOUNTED, 16 CUBIC-FOOT CAPACITY, UNDER REQUEST FOR PROPOSALS NO. ENG-11-184/NEG/-63-B-26), ISSUED BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS.

THE REPORT FURNISHED BY THE DEPARTMENT OF THE ARMY SHOWS THAT THE PROCUREMENT WAS AWARDED TO THE CHAIN BELT COMPANY ON MODEL NO. HBG AFTER SOLICITATION AND RECEIPT OF PROPOSALS FROM THAT COMPANY AND THE CONSTRUCTION MACHINERY COMPANY (ON MODEL NO. 16SM) ON THE BASIS OF A DETERMINATION AND FINDINGS MADE BY THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) UNDER DATE OF JULY 20, 1962, PURSUANT TO 10 U.S.C. 2304 (A) (13) AND PARAGRAPH 3-213 OF THE ARMED SERVICES PROCUREMENT REGULATION. THE DETERMINATION STATES THAT THE EQUIPMENT CONSTITUTES TECHNICAL EQUIPMENT; THAT STANDARDIZATION OF SUCH EQUIPMENT AND INTERCHANGEABILITY OF ITS PARTS ARE NECESSARY IN THE PUBLIC INTEREST; AND THAT THE PROCUREMENT OF SUCH EQUIPMENT OR OF ITS PARTS BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY. PURSUANT TO 10 U.S.C. 2310 SUCH A DETERMINATION IS FINAL. THE AWARD WAS MADE TO THE CHAIN BELT COMPANY AFTER NEGOTIATIONS.

THE STATUTORY AUTHORITY CITED, 10 U.S.C. 2304 (A) (13), AUTHORIZES PROCUREMENT BY NEGOTIATION ,FOR EQUIPMENT THAT HE (THE SECRETARY) DETERMINES TO BE TECHNICAL EQUIPMENT WHOSE STANDARDIZATION AND THE INTERCHANGEABILITY OF WHOSE PARTS ARE NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY IN THE PUBLIC INTEREST AND WHOSE PROCUREMENT BY NEGOTIATION IS NECESSARY TO ASSURE THAT STANDARDIZATION AND INTERCHANGEABILITY.' THE POLICIES AND PROCEDURES GOVERNING THE USE OF THIS AUTHORITY ARE SET OUT IN PARAGRAPH 3-213 OF THE ARMED SERVICES PROCUREMENT REGULATION AS WELL AS IN PARAGRAPH 3-213 OF ARMY PROCUREMENT PROCEDURE.

PARAGRAPH 3-213.2 OF APP PROVIDES THAT THE TERM "STANDARDIZATION" INCLUDES THAT UNIFORMITY CONSIDERED NECESSARY TO ACCOMPLISH MAXIMUM INTERCHANGEABILITY OF PARTS AND ALSO PROVIDES THAT NEGOTIATION UNDER 10 U.S.C. 2304 (A) (13) SHALL BE LIMITED TO PURCHASES OF ITEMS OF TECHNICAL EQUIPMENT WHICH MUST BE TAKEN INTO THE FIELD WITH TROOPS AND SHALL NOT BE USED TO PROCURE ITEMS OF EQUIPMENT USED EXCLUSIVELY IN INSTALLATIONS IN THE UNITED STATES. IT IS FURTHER PROVIDED THAT WHILE THIS AUTHORITY SHALL NOT BE USED FOR INITIAL PROCUREMENTS OF EQUIPMENT AND PARTS IT MAY BE USED DURING THE PERIOD OF STANDARDIZATION TO PURCHASE LATER TYPES AND MODELS OF THE EQUIPMENT STANDARDIZED IF SUBSTANTIALLY UNCHANGED IN BASIC DESIGN, CAPABILITIES AND INTERCHANGEABILITY OF MAJOR COMPONENTS AND REPAIR PARTS, AND THAT THE STOCKS ON HAND AND DUE IN FROM PROCUREMENT OF ANY MAKE AND MODEL OF EQUIPMENT PROPOSED FOR STANDARDIZATION MUST CONSTITUTE A SIGNIFICANT PORTION OF THE TOTAL NUMBER OF ITEMS IN THE SUPPLY SYSTEM--- NORMALLY, THE MINIMUM QUANTITY SHOULD BE IN THE RANGE OF APPROXIMATELY 15 PERCENT OF THE TOTAL.

YOUR PROTEST IS ON THE BASIS THAT THE PROCUREMENT DOES NOT QUALIFY FOR AWARD OF THE CONTRACT BY NEGOTIATION AND THE CONTRACT SHOULD HAVE BEEN AWARDED ON THE BASIS OF FORMAL ADVERTISING AND COMPETITIVE BID; THAT THE NEGOTIATION IMPROPERLY EXCLUDED KOEHRING COMPANY AND AT LEAST ONE OTHER SUPPLIER OF SAID CONCRETE MIXERS; AND THAT YOU QUESTION WHETHER THE REQUIREMENTS AS TO A DETERMINATION HAVE BEEN PROPERLY MET.

REGARDING YOUR CONTENTION THAT THE PROCUREMENT DID NOT QUALIFY FOR AN AWARD BY NEGOTIATION, IT IS URGED THAT 10 U.S.C. 2304 (A) CLEARLY STATES THAT FORMAL ADVERTISING SHALL BE UTILIZED "IN ALL CASES IN WHICH THE USE OF SUCH METHOD IS FEASIBLE AND PRACTICABLE UNDER EXISTING CONDITIONS AND CIRCUMSTANCES; " AND THAT IT IS ONLY WHEN FORMAL ADVERTISING IS NOT "FEASIBLE AND PRACTICABLE" AND WHEN THE PROCUREMENT ALSO MEETS ONE OF THE EXCEPTIONS THAT NEGOTIATION IS PERMITTED.

IT IS STATED THAT FORMAL ADVERTISING CLEARLY WAS "FEASIBLE AND PRACTICABLE" IN THE INSTANT CASE AND THIS IS SUPPORTED BY THE FACT THAT IN APRIL 1962 AN AWARD WAS MADE THROUGH FORMAL ADVERTISING TO JAEGER MACHINE COMPANY FOR 21 SIMILAR MIXERS. AT THIS TIME BIDS WERE RECEIVED FROM FOUR MANUFACTURERS OF CONCRETE MIXERS, SUCH FOUR MANUFACTURERS BEING FOR ALL PRACTICAL PURPOSES ALL OF THE POTENTIAL SUPPLIERS OF SUCH MIXERS AND ALL OF WHOM ARE MEMBERS OF THE MIXER MANUFACTURERS BUREAU OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. THAT FORMAL ADVERTISING WAS FEASIBLE AND PRACTICABLE IS STATED TO BE FURTHER EVIDENCED BY THE FACT NOTICE WAS GIVEN INITIALLY THAT THE INSTANT PROCUREMENT WAS TO BE MADE BY FORMAL ADVERTISING.

THE AWARD MADE IN APRIL 1962 FOR 21 CONCRETE MIXERS IS REPORTED TO HAVE BEEN FOR MIXERS POWERED BY AN AIR-COOLED ENGINE, WHEREAS THE ITEM APPROVED FOR STANDARDIZATION AND COVERED BY THE PROCUREMENT INVOLVED IS FOR CONCRETE MIXERS POWERED BY A WATER-COOLED ENGINE. ALSO, IN YOUR COMPILATION OF THE 16 CUBIC-FOOT CONCRETE MIXERS PURCHASED BY THE GOVERNMENT OVER THE PAST SEVERAL YEARS AND THE NUMBER FURNISHED BY KOEHRING COMPANY, THERE APPARENTLY HAVE BEEN INCLUDED ALL TYPES OF SUCH MIXERS RATHER THAN ONLY THE ITEM APPROVED FOR STANDARDIZATION, WHICH ITEM IS INVOLVED IN THE INSTANT PROCUREMENT.

THE RECORD SHOWS THAT THE REASON WHY NOTICE WAS ORIGINALLY GIVEN ON MAY 29, 1962, THAT THIS PROCUREMENT WOULD BE MADE BY FORMAL ADVERTISING WAS THAT THE PRIOR DETERMINATION DATED APRIL 12, 1956, AUTHORIZING PROCUREMENT OF THE ITEM BY NEGOTIATION PURSUANT TO 10 U.S.C. 2304 (A) (13), HAD EXPIRED BY ITS TERMS ON APRIL 12, 1962. THE DETERMINATION AUTHORIZING THE INSTANT PROCUREMENT TO BE MADE BY NEGOTIATION PURSUANT TO 10 U.S.C. 2304 (A) (13) WAS MADE ON JULY 20, 1962, AND BY ITS TERMS EXPIRES ON JUNE 30, 1963.

THERE APPEARS TO BE NO QUESTION THAT UNDER ORDINARY CIRCUMSTANCES IT WOULD BE "FEASIBLE AND PRACTICABLE" TO PROCURE CONCRETE MIXERS OF THE TYPE INVOLVED BY FORMAL ADVERTISING. THERE ARE SPECIFICATIONS FOR THE ITEM AND SEVERAL MANUFACTURERS HAVE MODELS COMPLYING WITH SPECIFICATIONS, WHICH ARE FAVORABLE CONDITIONS FOR FORMAL ADVERTISING. HOWEVER, IT WOULD APPEAR TO US THAT UNLESS SUCH CIRCUMSTANCES EXIST THERE WOULD BE LITTLE NEED OF A DETERMINATION TO STANDARDIZE UPON PARTICULAR MODELS. IN OTHER WORDS, STANDARDIZATION WOULD APPEAR TO BE PARTICULARLY APPLICABLE AND PERHAPS NECESSARY ONLY IN INSTANCES WHERE THERE ARE SEVERAL COMMERCIAL MODELS BY DIFFERENT MANUFACTURERS WHICH COMPLY WITH SPECIFICATION REQUIREMENTS. THERE WOULD BE NO NEED TO STANDARDIZE WHERE AN ITEM IS SUBSTANTIALLY TAILOR-MADE TO DETAILED SPECIFICATIONS; IN SUCH CASES ANY STANDARDIZATION REQUIREMENT WOULD BE BUILT INTO THE SPECIFICATION. WE CANNOT THEREFORE AGREE THAT A DETERMINATION TO NEGOTIATE FOR PURPOSES OF STANDARDIZATION AND INTERCHANGEABILITY OF PARTS PURSUANT TO 10 U.S.C. 2304 (A) (13) IS AUTHORIZED ONLY WHEN IT WOULD NOT BE OTHERWISE "FEASIBLE AND PRACTICABLE" TO UTILIZE FORMAL ADVERTISING PROCEDURES.

IT IS URGED THAT THE CONCRETE MIXERS IN QUESTION ARE NOT "TECHNICAL" EQUIPMENT SINCE THE MIXER IS A VERY SIMPLE MACHINE, NOT AT ALL LIKE THE EXAMPLES OF TECHNICAL EQUIPMENT RECITED IN ASPR 3-108 (A), WHICH EXAMPLES INCLUDE TANKS, RADAR, GUIDED MISSILES, AIRCRAFT AND ROCKETS. YOU STATE THAT FOR ALL PRACTICAL PURPOSES THESE MIXERS ARE SIMPLY A SHELF ITEM.

PARAGRAPH 3-108 OF ASPR IS ENTITLED "NEGOTIATION OF INITIAL PRODUCTION CONTRACTS FOR TECHNICAL OR SPECIALIZED MILITARY SUPPLIES," AND DOES NOT APPEAR TO HAVE ANY APPLICATION TO PROCUREMENT UNDER 10 U.S.C. 2304 (A) (13/--- IN FACT IT IS EXPRESSLY NOTED IN 3-108 THAT PROCUREMENTS AUTHORIZED THEREUNDER WILL NORMALLY CITE 2304 (A) (14) OR (16). IN OUR OPINION THE TERM ,TECHNICAL" EQUIPMENT AS USED IN 10 U.S.C. 2304 (A) (13) IS NOT RESTRICTED TO THE TYPE OF EQUIPMENT LISTED IN ASPR 3-108, BUT IS SUFFICIENTLY BROAD TO INCLUDE MOST MECHANICAL EQUIPMENT USED FOR MILITARY OR DEFENSE PURPOSES. THE WORD "TECHNICAL" IS DEFINED IN WEBSTER'S NEW INTERNATIONAL DICTIONARY, SECOND EDITION, AS "OF OR PERTAINING TO THE USEFUL OR MECHANICAL ARTS, OR ANY SCIENCE, BUSINESS, PROFESSION, SPORT, OR THE LIKE.' THERE IS NO REQUIREMENT THAT EQUIPMENT MUST ALSO BE COMPLEX OR INTRICATE.

WE FIND NOTHING IN THE REGULATIONS ISSUED BY THE ADMINISTRATIVE OFFICE THAT IS AT VARIANCE WITH THE AUTHORITY GRANTED UNDER 10 U.S.C. 2304 (A) (13), AND SINCE THE REGULATIONS APPEAR TO HAVE BEEN FOLLOWED IN THIS INSTANCE WE SEE NO BASIS FOR OBJECTING TO THE PROCEDURE EMPLOYED. SINCE STANDARDIZATION OF EQUIPMENT AND INTERCHANGEABILITY OF PARTS WAS DETERMINED TO BE "NECESSARY IN THE PUBLIC INTEREST," AND SINCE THAT DETERMINATION IS FINAL BY FORCE OF STATUTE, THE FACT THAT IT WAS FOUND NECESSARY TO LIMIT THE PROCUREMENT TO TWO MANUFACTURERS IN ORDER TO ACHIEVE SUCH STANDARDIZATION AND INTERCHANGEABILITY OF PARTS DOES NOT AFFORD A VALID BASIS FOR US TO OBJECT TO THIS PROCUREMENT.