B-154887, DEC. 11, 1964

B-154887, DEC. 11, 1964

TO FRED ISRAEL, ESQUIRE:

WE REFER TO YOUR LETTER DATED NOVEMBER 10, 1964, ON BEHALF OF DARE, INCORPORATED, BOX 312, TROY, OHIO, AND LETTER FROM DARE DATED AUGUST 3, 1964, REQUESTING THAT OUR OFFICE REVIEW THE PROPOSED PROCUREMENTS UNDER INVITATION FOR BIDS NO. AMC/E/-36-039-64-429-8 FOR THE PROCUREMENT OF AN OMNI-RANGE RECEIVING SET, RADIO AN/ARN-) ( AND INVITATION FOR BIDS NO. 36- 039-64-430-8 FOR THE PROCUREMENT OF A DIRECTION FINDER SET AN/ARN-) ). BOTH OF THESE INVITATIONS WERE TWO STEP, MULTI-YEAR PROCUREMENTS ISSUED BY THE PHILADELPHIA PROCUREMENT DIVISION, UNITED STATES ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA. WITH RESPECT TO THE OMNI-RANGE RECEIVER THE REQUIREMENTS ARE 1,170 ITEMS FOR FISCAL YEAR 1965 AND 1,610 ITEMS FOR FISCAL YEAR 1966. IN REGARD TO THE AUTOMATIC DIRECTION FINDER THE REQUIREMENTS ARE 1,038 ITEMS FOR FISCAL YEAR 1965; 1,154 ITEMS FOR FISCAL YEAR 1966 AND 1,154 ITEMS FOR FISCAL YEAR 1967.

THE INSTANT MATTER CONCERNS THE PROPRIETY OF A PROVISION IN STEP ONE OF THESE PROCUREMENTS WHICH REQUIRES THAT BIDDERS WHO ARE OTHERWISE FOUND TO BE TECHNICALLY QUALIFIED SUBMIT MODELS UNDER EACH INVITATION FOR TEST AND EVALUATION PURPOSES. A TECHNICAL EVALUATION OF THE PROPOSAL SUBMITTED BY DARE INDICATED THAT THIS BIDDER DID NOT HAVE A SUITABLE DESIGN FOR THE EQUIPMENT AND THE ADMINISTRATIVE OFFICE THEREFORE HAS DETERMINED THAT DARE COULD NOT OFFER MODELS FOR TESTING AND EVALUATION. FOR THIS REASON IT HAS BEEN DETERMINED THAT DARE'S PROPOSAL SHOULD NOT BE ACCEPTED.

THE CONTRACTING OFFICER HAS ADVISED THAT MODELS WERE NECESSARY FOR PRE- AWARD TESTING FOR EACH OF THE ABOVE PROCUREMENTS FOR THE FOLLOWING REASONS:

"* * * BID SAMPLES ARE JUSTIFIED IN THIS CASE BECAUSE THE PERFORMANCE OF THE EQUIPMENTS CANNOT BE ADEQUATELY EVALUATED FROM A WRITTEN PROPOSAL. THESE EQUIPMENTS ARE PRIMARY NAVIGATIONAL AIDS WHICH FIND THEIR MAJOR APPLICATION IN THE OPERATION OF AIRCRAFT ALONG THE COMMERCIAL AIRWAYS OF THE CONUS. FAILURE OF THIS EQUIPMENT WOULD CONSTITUTE A SERIOUS HAZARD NOT ONLY TO THE SAFETY OF THE FLIGHT CREW AND PASSENGERS BUT ALSO TO THE LIVES AND PROPERTY OF THE CIVILIAN POPULATION. IT IS NECESSARY FOR FLIGHT TESTS OF SUCH EQUIPMENT TO BE PERFORMED PRIOR TO ITS ACCEPTANCE FOR USE IN THE ARMY AIRCRAFT FLEET IN ORDER THAT ITS EASE OF OPERATION, ITS ACCURACY WHEN INSTALLED IN AN AIRFRAME AND ITS COMPATIBILITY WITH EXISTING ELECTRONIC CONFIGURATIONS CAN BE ESTABLISHED. IT SHOULD BE BORNE IN MIND THAT SATISFACTORY OPERATION OF ELECTRONIC EQUIPMENT IN AIRCRAFT IS NOT DETERMINABLE BY LABORATORY TESTS ALONE. SUCH EFFECTS AS CALIBRATION FOR THE AIRCRAFT SILHOUETTE, PROPELLER AND ROTOR MODULATION AND TOTAL ISOLATION FROM GROUND CANNOT BE ADEQUATELY EVALUATED EXCEPT BY ACTUAL INSTALLATIONS AND FLIGHT TEST. * * *

"* * * THE REQUIREMENT FOR MODELS IS NOT IN ANY WAY CONNECTED WITH THE EVALUATION OF THE CAPACITY OF THE BIDDER. IT IS INTENDED TO PERMIT THE GOVERNMENT TO ESTABLISH THAT A CONTRACT RESULTING FROM THIS INVITATION FOR BID WILL BE FOR A PIECE OF EQUIPMENT FROM AN ESTABLISHED DESIGN KNOWN TO BE SATISFACTORY FOR USE IN ARMY AIRCRAFT ON THE BASIS OF ACTUAL TEST OF THE EQUIPMENT ITSELF. AS POINTED OUT ABOVE, THERE IS NO MEANS OF ADEQUATELY EVALUATING EQUIPMENT OF THIS TYPE PURELY FROM A WRITTEN PROPOSAL.'

ARMED SERVICES PROCUREMENT REGULATION SECTION 2-202.4 (B) PROVIDES:

"BIDDERS SHALL NOT BE REQUIRED TO FURNISH A BID SAMPLE OF A PRODUCT THEY PROPOSE TO FURNISH UNLESS THERE ARE CERTAIN CHARACTERISTICS OF THE PRODUCT WHICH CANNOT BE DESCRIBED ADEQUATELY IN THE APPLICABLE SPECIFICATION OR PURCHASE DESCRIPTION, THUS NECESSITATING THE SUBMISSION OF A SAMPLE TO ASSURE PROCUREMENT OF AN ACCEPTABLE PRODUCT. IT MAY BE APPROPRIATE TO REQUIRE BID SAMPLES, FOR EXAMPLE, WHERE THE PROCUREMENT IS OF PRODUCTS THAT MUST BE SUITABLE FROM THE STANDPOINT OF BALANCE, FACILITY OF USE, GENERAL "FEEL," COLOR, OR PATTERN, OR THAT HAVE CERTAIN OTHER CHARACTERISTICS WHICH CANNOT BE DESCRIBED ADEQUATELY IN THE APPLICABLE SPECIFICATIONS. HOWEVER, WHERE MORE THAN A MINOR PORTION OF THE CHARACTERISTICS OF THE PRODUCT CANNOT BE ADEQUATELY DESCRIBED IN THE SPECIFICATION, THE PRODUCT SHOULD BE PROCURED BY TWO-STEP FORMAL ADVERTISING OR NEGOTIATION, AS APPROPRIATE.'

PURSUANT TO OUR REVIEW OF THIS REGULATION WE FIND NO PROVISION THEREIN WHICH WOULD SPECIFICALLY PRECLUDE THE REQUIREMENT FOR A MODEL IN THESE PROCUREMENTS. YOU HAVE ALLEGED THAT THE MODEL REQUIREMENT DOES NOT CONFORM TO THE REQUIREMENTS OF ARMED SERVICES PROCUREMENT REGULATION SECTIONS 2-202.4 (D) AND 2-202.4 (E) SINCE THE INVITATIONS DID NOT SPECIFICALLY USE THE LANGUAGE PROVIDED. PURSUANT TO OUR REVIEW OF THE MATTER WE FIND THAT BIDDERS WERE ADEQUATELY ADVISED BY THE PERFORMANCE TYPE SPECIFICATIONS AS TO THE REQUIREMENTS WHICH THE MODELS WOULD BE EXPECTED TO MEET. THE FACT THAT NO OTHER BIDDER HAS PROTESTED THAT THE SPECIFICATIONS DID NOT ADEQUATELY DEFINE THE GOVERNMENT'S NEEDS INDICATES THAT OTHER BIDDERS HAVE HAD NO APPARENT DIFFICULTIES IN CONSTRUCTING A MODEL TO MEET THE REQUIREMENTS OF THE PERFORMANCE TYPE SPECIFICATIONS. FEEL THAT THIS INVITATION COMPLIES SUBSTANTIALLY WITH THE REQUIREMENTS OF ASPR 2-202.4; THEREFORE, WE WOULD NOT FEEL JUSTIFIED IN RECOMMENDING CANCELLATION OF THESE INVITATIONS FOR THE REASONS ADVANCED BY YOU REGARDING ASPR 2 202.4 (D) AND 2-202.4 (E).

YOUR PROTEST ALSO CONCERNS THE QUESTION WHETHER THE REQUIREMENT FOR MODELS IN THESE PROCUREMENTS IS JUSTIFIED WHEN THE COST OF PRODUCING SUCH MODELS IS CONSIDERED. IN THIS CONNECTION YOU ASSERT THAT THE REQUIREMENT FOR A MODEL WILL RESTRICT THE COMPETITION UNDER THESE PROCUREMENTS SINCE ALL BIDDERS CANNOT AFFORD TO PRODUCE A MODEL. WITH RESPECT TO THIS ALLEGATION THE FOLLOWING LANGUAGE FROM 40 COMP. GEN. 40, 42 APPEARS APPLICABLE:

"THE PROCEDURE EMPLOYED IN TWO-STEP ADVERTISING IS NOT UNLIKE THAT FOLLOWED IN THE PROCUREMENT OF QUALIFIED PRODUCTS. IN THE LATTER PROCEDURE, THE AWARD OF THE CONTRACT IS RESTRICTED TO MANUFACTURERS WHO HAVE PREVIOUSLY QUALIFIED THEIR PRODUCTS. IN 36 COMP. GEN. 809, WE HELD THAT SUCH AN AWARD WAS NOT RENDERED ILLEGAL BECAUSE SOME OF THE BIDDERS WERE NOT ABLE TO QUALIFY THEIR PRODUCTS IN TIME FOR THE AWARD. WITH REGARD TO THE CONTENTION THAT THE QUALIFIED PRODUCTS PROCEDURE WAS RESTRICTIVE OF FULL AND FREE COMPETITION, WE POINTED OUT THAT WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE PROCEDURE AS OTHER THAN A PROPER METHOD OF PROCUREMENT, SINCE THE ADMINISTRATIVE AGENCIES ARE VESTED WITH A REASONABLE DEGREE OF DISCRETION TO DETERMINE THE EXTENT OF COMPETITION WHICH MAY BE REQUIRED IN PARTICULAR CASES AND LEGITIMATE RESTRICTIONS ON COMPETITION IN GOVERNMENT PROCUREMENT HAVE BEEN DETERMINED TO BE VALID WHEN THE NEEDS OF THE AGENCY HAVE REQUIRED IT. IN VIEW OF THE SIMILARITY OF THE SITUATIONS, THE PRINCIPLES ENUNCIATED WITH RESPECT TO QUALIFIED PRODUCTS PROCUREMENTS ARE APPLICABLE TO THE INSTANT TWO-STAGE PROCUREMENT.'

IN THIS CASE THE RECORD INDICATES A SAMPLE WAS NECESSARY TO TEST WHETHER THE EQUIPMENT PROPOSED BY BIDDERS WAS COMPATIBLE WITH EXISTING EQUIPMENT. THIS DETERMINATION COULD NOT BE MADE BY EVALUATING ONLY A BIDDER'S TECHNICAL APPROACH. WE DO NOT FEEL THAT THE COST OF PRODUCING A MODEL PLACED AN UNREASONABLE BURDEN ON BIDDERS. CONSEQUENTLY, WE FIND THAT THE PROCURING ACTIVITY ACTED REASONABLY IN REQUESTING A MODEL WITH THE TECHNICAL PROPOSAL AND IN OUR OPINION THE RESULTING RESTRICTION ON COMPETITION IMPOSED BY THE REQUIREMENT FOR A MODEL WAS VALID. YOU HAVE RAISED THE QUESTION WHETHER THE REQUIREMENT FOR A MODEL IS FOR THE PURPOSE OF DETERMINING THE CAPACITY OF A BIDDER. MODELS WERE REQUESTED IN THIS CASE IN ORDER THAT THE PROCURING ACTIVITY COULD DETERMINE WHETHER EQUIPMENT PROPOSED BY BIDDERS MET THE GOVERNMENT'S REQUIREMENTS. THE REQUIREMENT FOR MODELS THEREFORE WAS FOR THE PURPOSE OF DETERMINING THE RESPONSIVENESS OF THE PROPOSALS SUBMITTED. CAPACITY AND CREDIT ARE MATTERS OF RESPONSIBILITY WHICH ARE FOR CONSIDERATION ONLY AFTER THE BIDDER HAS SUBMITTED A PROPOSAL MEETING THE GOVERNMENT'S TECHNICAL NEEDS.

YOU ALSO ALLEGE THAT EXHIBIT 2, THE "CRITERIA FOR EVALUATION OF TECHNICAL PROPOSALS" WHICH IS SUBSTANTIALLY THE SAME FOR BOTH INVITATIONS, IS NOT SUFFICIENT TO PERMIT AN EVALUATION OF THE PROPOSALS SUBMITTED. THE ARMY ON THIS ISSUE HAS ADVISED OUR OFFICE AS FOLLOWS:

"* * * THE EVALUATION FACTORS, WHEN CONSIDERED IN CONJUNCTION WITH THE ELECTRONICS COMMAND TECHNICAL REQUIREMENTS AND THE DATA REGARDING ENVIRONMENTAL TESTING SET FORTH IN THE INVITATION FOR BIDS ITSELF, ARE BELIEVED TO BE SUFFICIENTLY DEFINITIVE FOR THE EVALUATION AND NEGOTIATION OF TECHNICAL PROPOSALS UNDER STEP 1 OF TWO-STEP FORMAL ADVERTISING.'

IN VIEW OF THE DISCRETION GIVEN TO BIDDERS TO FORMULATE TECHNICAL PROPOSALS FOR MEETING THE REQUIREMENTS OF THE PERFORMANCE TYPE SPECIFICATIONS, IT IS OUR OPINION THAT IT WAS NECESSARY IN SUCH CIRCUMSTANCES TO HAVE THE CRITERIA FOR EVALUATION IN GENERAL RATHER THAN SPECIFIC FORM. ARMY'S POSITION IS THAT THE CRITERIA ARE SUFFICIENT FOR THE EVALUATION OF TECHNICAL PROPOSALS AND NO APPARENT DIFFICULTIES HAVE BEEN ENCOUNTERED IN THE TECHNICAL EVALUATION OF BIDDERS. IT HAS NOT BEEN SHOWN THAT ARMY'S DETERMINATION THAT THE CRITERIA ARE SUFFICIENT IS ERRONEOUS; CONSEQUENTLY, WE WILL ACCEPT ARMY'S POSITION ON THIS ISSUE.

WE HAVE CONSIDERED THE OTHER METHODS AVAILABLE FOR THE PROCUREMENT OF THESE ITEMS. IN THIS SITUATION, ONE-STEP FORMAL ADVERTISING WOULD NOT BE FEASIBLE AS A TWO-STEP PROCUREMENT SINCE SUFFICIENT DATA FOR THE DRAFTING OF DETAILED SPECIFICATIONS IS NOT AVAILABLE. NEGOTIATION, THE METHOD USED TO PROCURE THESE ITEMS IN THE PAST, WOULD NOT BE AS PREFERABLE AS A TWO- STEP PROCUREMENT SINCE A PROCUREMENT BY NEGOTIATION DOES NOT ASSURE THAT SUFFICIENT DATA FOR THE DRAFTING OF DETAILED SPECIFICATIONS WILL BECOME AVAILABLE. A PROCUREMENT RESTRICTED TO BIDDERS WHO HAVE QUALIFIED THEIR PRODUCTS WOULD IMPOSE BASICALLY THE SAME RESTRICTIONS ON COMPETITION WHICH ARE PRESENT IN THE INSTANT MATTER; CONSEQUENTLY, WE WOULD NOT FEEL JUSTIFIED IN RECOMMENDING THAT ARMY USE A QUALIFIED PRODUCTS PROCEDURE TO PROCURE THESE ITEMS.

PURSUANT TO OUR REVIEW OF THE MATTER WE FEEL THAT THE PROCEDURE FOR PROCURING THESE ITEMS WAS IN THE BEST INTEREST OF THE UNITED STATES. HAVE FOUND NO SPECIFIC LEGAL OBJECTION TO ARMY'S ACTION; THEREFORE, YOUR PROTEST IS DENIED.