B-154716, OCT. 16, 1964

B-154716: Oct 16, 1964

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER WITH ENCLOSURES DATED JULY 10. ARGONNE IS THE PRIME CONTRACTOR UNDER A COST-TYPE CONTRACT WITH THE ATOMIC ENERGY COMMISSION FOR OPERATING THE ZERO GRADIENT SYNCHROTRON AT THE LABORATORY SITE IN DU PAGE COUNTY. THE PROCUREMENT IN THIS CASE WAS FOR A LOGISTIC MODULE SYSTEM FOR USE WITH THE SYNCHROTRON. ITEMS WERE TO BE IN ACCORDANCE WITH PERFORMANCE TYPE SPECIFICATIONS DATED JANUARY 10. PROPOSALS WERE TO BE SUBMITTED BY FEBRUARY 24. A COMPREHENSIVE EVALUATION WAS MADE OF THE SYSTEMS PROPOSED BY FOUR MANUFACTURERS INCLUDING YOUR CONCERN. ARGONNE STATES: "THE INVESTIGATION CARRIED OUT BY THE LABORATORY IS UNDOUBTEDLY THE MOST COMPREHENSIVE AND THOROUGH STUDY OF ITS KIND PERFORMED IN THIS COUNTRY.'.

B-154716, OCT. 16, 1964

TO NANOSECOND SYSTEMS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER WITH ENCLOSURES DATED JULY 10, 1964, PROTESTING THE REJECTION OF YOUR PROPOSAL BY THE ARGONNE NATIONAL LABORATORY OPERATED BY THE UNIVERSITY OF CHICAGO.

ARGONNE IS THE PRIME CONTRACTOR UNDER A COST-TYPE CONTRACT WITH THE ATOMIC ENERGY COMMISSION FOR OPERATING THE ZERO GRADIENT SYNCHROTRON AT THE LABORATORY SITE IN DU PAGE COUNTY, ILLINOIS. THE PROCUREMENT IN THIS CASE WAS FOR A LOGISTIC MODULE SYSTEM FOR USE WITH THE SYNCHROTRON. ITEMS WERE TO BE IN ACCORDANCE WITH PERFORMANCE TYPE SPECIFICATIONS DATED JANUARY 10, 1964, PREPARED BY ARGONNE. PROPOSALS WERE TO BE SUBMITTED BY FEBRUARY 24, 1964. YOUR PROPOSALS DATED FEBRUARY 21, 1964, RECEIVED BY THE PURCHASING DEPARTMENT AT ARGONNE ON FEBRUARY 24, 1964, QUOTED THE LOWEST PRICE FOR THE SYSTEM.

AFTER RECEIPT OF THE PROPOSALS, A COMPREHENSIVE EVALUATION WAS MADE OF THE SYSTEMS PROPOSED BY FOUR MANUFACTURERS INCLUDING YOUR CONCERN. ARGONNE STATES: "THE INVESTIGATION CARRIED OUT BY THE LABORATORY IS UNDOUBTEDLY THE MOST COMPREHENSIVE AND THOROUGH STUDY OF ITS KIND PERFORMED IN THIS COUNTRY.' THIS EVALUATION WAS MADE AT THE SUGGESTION OF THE ARGONNE ACCELERATOR USERS GROUP ELECTRONICS ADVISORY COMMITTEE CONSISTING OF MIDWESTERN PHYSICISTS WHO ARE USING OR PLANNING TO USE THIS EQUIPMENT. A REVIEW WAS ALSO MADE OF THE SPECIFICATIONS FOR THE PROJECT. THE COMMITTEE CONCLUDED THAT THE SPECIFICATIONS WERE REASONABLE AND RECOMMENDED THAT THE LABORATORY PURCHASE THE SYSTEM PROPOSED BY EDGERTON, GERMESHAUSEN AND GRIER, INC., SALEM, MASSACHUSETTS.

ON JULY 9, 1964, YOU PROTESTED TO ARGONNE THE DETERMINATION TO REJECT YOUR PROPOSAL. ON JULY 10, 1964, YOU TRANSMITTED COPIES OF YOUR LETTERS AND APPENDIXES OF JULY 9, 1964, TO ARGONNE, AND REQUESTED THAT OUR OFFICE REVIEW THIS PROCUREMENT. THE COPIES OF YOUR LETTERS TO ARGONNE ALLEGE IN EFFECT THAT THE DECISION TO PURCHASE A SYSTEM OTHER THAN YOURS MAY HAVE BEEN SOMEWHAT BIASED AND THAT ARGONNE MAY NOT HAVE BEEN FAMILIAR ENOUGH WITH YOUR EQUIPMENT TO MAKE A PROPER EVALUATION OF YOUR SYSTEM. YOUR LETTERS ALSO ALLEGE GENERALLY THAT THE AWARD TO EDGERTON, GERMESHAUSEN AND GRIER, INC., WAS IN VIOLATION OF THE SMALL BUSINESS ACT AND THAT THIS PROCUREMENT UNLESS REVERSED COULD ESTABLISH STANDARDIZATION FOR FUTURE PURCHASES BY ARGONNE AND ASSOCIATED MIDWESTERN INSTITUTIONS WHICH COULD RESULT IN ADDITIONAL EXPENDITURES TO AEC OF SOME $1,000,000.

ARGONNE STATES THAT MANY OF THE NECESSARY AND DESIRABLE FEATURES IN THE SPECIFICATIONS FOR THIS PROCUREMENT ARE STATED IN GENERAL RATHER THAN IN EXPLICIT FORM AND THAT THIS WAS DONE IN ORDER THAT THE SOURCE

OF THE EQUIPMENT COULD NOT BE LIMITED TO ONE CONCERN. IN THIS CONNECTION ARGONNE CITED SPECIFICATION NO. 2.1.1.1, 2.1.3.1, AND 2.1.4.11, AS EXAMPLES OF THE SPECIFICATIONS BEING STATED IN GENERAL RATHER THAN SPECIFIC FORM. CONSEQUENTLY, STATES ARGONNE, IN EVALUATION OF PROPOSALS THERE IS A NECESSITY FOR JUDGMENT BY LABORATORY PERSONNEL SINCE MANY OF THE CHARACTERISTICS OF THE SYSTEMS OFFERED FOR CONSIDERATION ARE COVERED IN THE SPECIFICATIONS BY IMPLICATION.

GENERALLY, WITH RESPECT TO YOUR PROPOSAL, IT WAS FOUND AS FOLLOWS:

"THE PROPOSAL FOR A LOGIC SYSTEM FOR SHELF SUBMITTED BY NANOSECOND SYSTEMS, INCORPORATED MAY WITH SOME SIMPLIFICATION, BE REGARDED AS TWO SEPARATE PROPOSALS. THE FIRST, HEREINAFTER REFERRED TO AS NANOSECOND SYSTEMS, INCORPORATED PROPOSAL A, IS TO SUPPLY FOR SHELF PARTICULAR MODELS SELECTED FROM THE CORPORATION'S STANDARD CATALOG LINE OF MODULAR NANOSECOND INSTRUMENTS. THESE MODELS, PERTINENT TO NANOSECOND SYSTEMS, INCORPORATED PROPOSAL A, ARE IDENTIFIED BY MODEL NUMBERS ENDING IN G. THE SECOND PROPOSAL, HEREINAFTER REFERRED TO AS NANOSECOND SYSTEMS, INCORPORATED PROPOSAL B IS TO SUPPLY MODIFIED VERSIONS OF STANDARD CATALOG NANOSECOND MODULES, INTENDED TO CONFORM TO CERTAIN SPECIFICATIONS OF THE ARGONNE NATIONAL LABORATORY SHELF BID SOLICITATION. THESE MODIFIED MODULES ARE IDENTIFIED BY MODEL NUMBERS ENDING IN T.'

YOUR PROPOSAL WAS REJECTED BY ARGONNE PURSUANT TO THE DETERMINATION THAT YOUR PROPOSALS A AND B DID NOT COMPLY WITH TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS. ARGONNE TAKES THE POSITION THAT IT WAS SUFFICIENTLY FAMILIAR WITH YOUR SYSTEM TO MAKE A PROPER EVALUATION OF YOUR PROPOSAL. THIS PROCUREMENT HAS BEEN REVIEWED BY THE STAFF OF THE ATOMIC ENERGY COMMISSION AND BY LETTER DATED SEPTEMBER 17, 1964, WE WERE ADVISED BY AEC THAT IT CONCURS WITH ARGONNE'S REASONS FOR REJECTING YOUR PROPOSAL. MOREOVER, AEC HAS CONCURRED WITH ARGONNE'S POSITION THAT IS WAS SUFFICIENTLY FAMILIAR WITH YOUR SYSTEM TO MAKE A PROPER EVALUATION OF YOUR PROPOSAL. PURSUANT TO ITS REVIEW OF THE MATTER AEC CONCLUDES THAT THIS PROCUREMENT WAS CONDUCTED FAIRLY AND IMPARTIALLY WITHIN ESTABLISHED PROCUREMENT POLICIES AND THAT THE AWARD WAS PROPERLY MADE TO EDGERTON, GERMESHAUSEN AND GRIER, INCORPORATED.

IN SITUATIONS INVOLVING DETERMINATIONS WHETHER OFFERINGS MEET THE TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS, IT IS THE POSITION OF OUR OFFICE THAT SUCH DETERMINATIONS ARE PRIMARILY THE FUNCTION OF THE

PROCURING ACTIVITY AND WILL NOT BE QUESTIONED BY OUR OFFICE UNLESS SHOWN TO BE ARBITRARY OR CAPRICIOUS. SEE 17 COMP. GEN. 554; 40 ID. 35; B- 150103, APRIL 23, 1963. WE HAVE REVIEWED ARGONNE'S REPORT REGARDING THE TECHNICAL EVALUATION OF YOUR PROPOSAL, AND WE CANNOT SAY THAT THE DETERMINATION TO REJECT YOUR PROPOSAL, WHICH HAS BEEN CONCURRED IN BY AEC, WAS ARBITRARY OR CAPRICIOUS. IN PROCUREMENTS BY THE GOVERNMENT IT IS OUR POSITION THAT OFFERINGS WHICH DO NOT MEET THE NEEDS OF AN AGENCY NEED NOT BE ACCEPTED EVEN THOUGH OFFERED AT A LOWER PRICE. SEE B-152015, SEPTEMBER 25, 1963. THIS RULE WOULD BE EQUALLY APPLICABLE TO THIS PROCUREMENT BY ARGONNE. PURSUANT TO OUR REVIEW OF THE MATTER WE FIND NO BASIS FOR YOUR GENERAL ALLEGATION THAT THE AWARD TO EDGERTON, GERMESHAUSEN AND GRIER, INC., WAS IN VIOLATION OF THE SMALL BUSINESS ACT.

WITH RESPECT TO THE QUESTION WHETHER THIS PROCUREMENT WILL RESULT IN STANDARDIZATION FOR FUTURE PROCUREMENTS, ARGONNE AND AEC HAVE TAKEN THE FOLLOWING POSITION:

"THE AWARD OF THIS CONTRACT TO EGG WILL NOT NECESSARILY STANDARDIZE FUTURE PURCHASES OF EQUIPMENT BY ANL SINCE ANL WILL CONTINUE TO ENDEAVOR TO PROCURE EQUIPMENT WHICH WILL MEET BEST THE LABORATORY'S NEEDS. WHILE THE AWARD OF THIS CONTRACT WILL UNDOUBTEDLY INFLUENCE OTHER INSTITUTIONS IN THE CURRENT PURCHASE OF SIMILAR FAST LOGIC EQUIPMENT, FREQUENT ADVANCES IN INSTRUMENTATION CAPABILITIES RENDER STANDARDIZATION OVER MORE THAN A LIMITED PERIOD UNWISE IN THIS FIELD.

"THERE APPEARS LITTLE BASIS FOR NANOSECOND'S ESTIMATE OF TOTAL LOGIC EQUIPMENT PROCUREMENT OF $2,500,000 WITH A SAVINGS OF $1,000,000 TO THE COMMISSION OVER THE NEXT TWO YEARS. ANL HOPES TO OBTAIN NO MORE THAN $700,000 IN FAST LOGIC EQUIPMENT OVER THIS PERIOD AND THE AMOUNT WHICH MAY BE PURCHASED BY ALL OTHER COMMISSION CONTRACTORS IN THE MIDWEST WILL PROBABLY NOT EXCEED AN EQUIVALENT AMOUNT. WHILE ANL AGREES WITH NANOSECOND "THAT A CLEAR OBLIGATION ALWAYS EXISTS TO OBTAIN THE BEST VALUE PER DOLLAR FOR ALL EQUIPMENT PURCHASE," ONLY THE PURCHASE OF EQUIPMENT WHICH ADEQUATELY MEETS THE LABORATORY'S NEEDS DOES IN FACT SATISFY THIS OBLIGATION.'

IN VIEW OF THE RECORD PRESENTED TO OUR OFFICE WE FIND NO LEGAL BASIS TO QUESTION THE AWARD TO EDGERTON, GERMESHAUSEN AND GRIER, INCORPORATED.