B-155728, MAY 12, 1965, 44 COMP. GEN. 704

B-155728: May 12, 1965

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CONTRACTS - SPECIFICATIONS TESTS - WAIVER ERRONEOUS A BIDDER WHO PURSUANT TO AN AMENDMENT TO AN INVITATION FOR FLYING TOW TARGETS WAS PERMITTED TO OFFER AN ITEM DIFFERENT FROM THE SPECIFICATIONS ON THE BASIS THAT IT HAD BEEN APPROVED AND WHO WAS ERRONEOUSLY GRANTED A WAIVER OF THE TESTING REQUIREMENT IS NOT A BIDDER THAT MAY BE CONSIDERED TO HAVE BEEN MISLED INTO SUBMITTING A BID OR PRECLUDED FROM COMPETING ON AN EQUAL BASIS FROM OTHER BIDDERS OFFERING A TESTED ITEM MEETING THE SPECIFICATIONS WHEN IN FACT THE ITEM OFFERED BY SUCH LOW BIDDER WAS SUFFICIENTLY DIFFERENT FROM THE SPECIFICATIONS TO PRECLUDE A DETERMINATION WITHOUT TESTING. REJECTION OF THE BID AS NONRESPONSIVE WAS PROPER. A BIDDER WHO WAS ERRONEOUSLY GRANTED A WAIVER OF THE TESTING REQUIREMENTS FOR A MODIFIED ITEM WHICH AT THE TIME OF AWARD COULD NOT BE DETERMINED TO BE COMPATIBLE WITHOUT SUCH TESTS IS NOT ENTITLED BY REASON OF THE ERRONEOUS TESTING ADVICE TO HAVE THE AWARD DELAYED UNTIL TESTS COULD BE ACCOMPLISHED WHEN THE OTHER BIDDERS WHO OFFERED ITEMS MEETING THE SPECIFICATIONS WERE NOT GIVEN THE SAME OPPORTUNITY.

B-155728, MAY 12, 1965, 44 COMP. GEN. 704

CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC., OFFERED TESTS - PRIOR PROCUREMENTS - TEST WAIVED. CONTRACTS - SPECIFICATIONS TESTS - WAIVER ERRONEOUS A BIDDER WHO PURSUANT TO AN AMENDMENT TO AN INVITATION FOR FLYING TOW TARGETS WAS PERMITTED TO OFFER AN ITEM DIFFERENT FROM THE SPECIFICATIONS ON THE BASIS THAT IT HAD BEEN APPROVED AND WHO WAS ERRONEOUSLY GRANTED A WAIVER OF THE TESTING REQUIREMENT IS NOT A BIDDER THAT MAY BE CONSIDERED TO HAVE BEEN MISLED INTO SUBMITTING A BID OR PRECLUDED FROM COMPETING ON AN EQUAL BASIS FROM OTHER BIDDERS OFFERING A TESTED ITEM MEETING THE SPECIFICATIONS WHEN IN FACT THE ITEM OFFERED BY SUCH LOW BIDDER WAS SUFFICIENTLY DIFFERENT FROM THE SPECIFICATIONS TO PRECLUDE A DETERMINATION WITHOUT TESTING, AND, THEREFORE, REJECTION OF THE BID AS NONRESPONSIVE WAS PROPER. A BIDDER WHO WAS ERRONEOUSLY GRANTED A WAIVER OF THE TESTING REQUIREMENTS FOR A MODIFIED ITEM WHICH AT THE TIME OF AWARD COULD NOT BE DETERMINED TO BE COMPATIBLE WITHOUT SUCH TESTS IS NOT ENTITLED BY REASON OF THE ERRONEOUS TESTING ADVICE TO HAVE THE AWARD DELAYED UNTIL TESTS COULD BE ACCOMPLISHED WHEN THE OTHER BIDDERS WHO OFFERED ITEMS MEETING THE SPECIFICATIONS WERE NOT GIVEN THE SAME OPPORTUNITY.

TO THE DEL MAR ENGINEERING LABORATORIES, MAY 12, 1965:

REFERENCE IS MADE TO YOUR TELEGRAM DATED FEBRUARY 5, 1965, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AWARD OF A CONTRACT TO HAYES INTERNATIONAL CORPORATION UNDER INVITATION FOR BIDS NO. 600-69-65, ISSUED SEPTEMBER 3, 1964, BY THE NAVY PURCHASING OFFICE.

THE IFB SOLICITED BIDS TO FURNISH SPECIFIED QUANTITIES OF TOWED TARGETS TDU-22 A/B AND TDU-22/B TO BE CONSTRUCTED IN ACCORDANCE WITH DRAWINGS AND SPECIFICATIONS OBTAINED BY THE GOVERNMENT FROM HAYES AS TECHNICAL DATA UNDER AN EARLIER CONTRACT. THE HAYES SPECIFICATION, WHICH WAS OF THE DETAILED OR "COOK-BOOK" TYPE THAT ALLOWED ANY COMPANY IN THE TOW TARGET BUSINESS TO COMPETE, DESCRIBED A TARGET WHICH WOULD BE COMPATIBLE WITH LAUNCHERS ON BOTH THE F4 AND F8 AIRCRAFT SYSTEMS.

THE RECORD SHOWS THAT SUBSEQUENT TO ISSUANCE OF THE IFB, YOU INFORMED THE NAVY THAT YOU HAD DEVELOPED A TARGET WHICH, THOUGH IT DID NOT COMPLY WITH THE HAYES SPECIFICATION, HAD BEEN APPROVED AND ACCEPTED BY THE NAVY ON THE F8 AIRCRAFT AND COULD MEET THE NAVY REQUIREMENT AT A SUBSTANTIAL MONETARY SAVINGS. THEREFORE, YOU REQUESTED THE OPPORTUNITY TO BID ON YOUR TARGET UNDER THE IFB. ACCORDINGLY, THE PROCURING ACTIVITY, BASED ON THE BELIEF RESULTING FROM INFORMATION RECEIVED FROM THE NAVY'S TESTING ACTIVITIES THAT YOUR TARGET HAD BEEN FLOWN SATISFACTORILY ON BOTH F4 AND F8 AIRCRAFT AT THE DESIRED SPEEDS, AMENDED THE IFB TO INCLUDE AN ALTERNATE PERFORMANCE SPECIFICATION WHICH IT THOUGHT REFLECTED ITS NEEDS AND WOULD ALLOW YOUR TARGET AND OTHER POSSIBLE ALTERNATE TARGETS TO BE RESPONSIVELY OFFERED UNDER THE IFB.

THE CONTRACTING OFFICER REPORTS THAT IN VIEW OF THE SHORT TIME BETWEEN THE DATE OF SUCH AMENDMENT, OCTOBER 27, AND THE EXTENDED BID OPENING DATE OF NOVEMBER 17, YOU INQUIRED WHETHER THE IFB FLIGHT TEST REQUIREMENT COULD BE WAIVED SINCE YOUR TARGET HAD ALREADY BEEN SUCCESSFULLY TESTED. THE BUREAU OF NAVAL WEAPONS, IN THE BELIEF THAT ANY MODIFICATION TO YOUR TARGET TO MEET THE ALTERNATE SPECIFICATION OF THE IFB WOULD BE MINOR, ISSUED A LETTER DATED NOVEMBER 6, 1964, STATING THAT THE PREVIOUS TESTS OF YOUR TARGET WOULD BE VALID FOR THE TARGET OFFERED BY YOU UNDER THE IFB.

ON DECEMBER 1, THE DATE TO WHICH BID OPENING WAS ULTIMATELY EXTENDED BY AMENDMENT NO. 5 ISSUED NOVEMBER 10, THE EIGHT BIDS WHICH HAD BEEN SUBMITTED WERE OPENED. THE THREE LOW BIDS WERE AS FOLLOWS:

DEL MAR ENGINEERING LABORATORIES $ 986,776.90

HAYES INTERNATIONAL CORPORATION $1,142,097.60

NORTHRUP-VENTURA CORPORATION $1,157,126.98

SUBSEQUENTLY, HAYES PROTESTED THAT YOUR BID DATA DID NOT SHOW COMPLIANCE WITH THE ALTERNATE SPECIFICATION. EVALUATION OF YOUR BID DISCLOSED THAT THE TARGET OFFERED BY YOUR BID VARIED SIGNIFICANTLY FROM THE TARGET PREVIOUSLY TESTED, AND, THEREFORE, TESTING WOULD BE REQUIRED TO ASSURE ITS COMPATIBILITY WITH CURRENT TOW SYSTEMS. IT WAS ALSO CONCLUDED THAT THE DIAGRAMS AND DATA SUBMITTED WITH YOUR BID WERE INSUFFICIENT TO SHOW COMPLIANCE WITH VARIOUS SPECIFICATION REQUIREMENTS. ACCORDINGLY, YOUR BID WAS REJECTED AS NONRESPONSIVE, AND AWARD WAS MADE TO HAYES ON FEBRUARY 2, 1965.

IT IS YOUR POSITION THAT AWARD TO ANY ONE OTHER THAN YOU IS IMPROPER. YOU CONTEND THAT YOUR BID WAS RESPONSIVE AND WAS $160,000 LOWER THAN HAYES' BID. YOU STATE THAT THE MODIFICATIONS WHICH YOU MADE IN YOUR TARGET WERE MINOR, WERE MADE ONLY TO COMPLY WITH THE IFB REQUIREMENTS, AND COULD IN NO WAY NULLIFY PREVIOUS FLIGHT TESTING OR REFLECTIVITY TESTS. FURTHERMORE, YOU ASSERT THAT NAVY COULD HAVE INSPECTED YOUR SAMPLE TARGETS TO ASCERTAIN WHETHER THEY MET THE IFB REQUIREMENTS.

CONCERNING THE CHANGES WHICH YOU MADE IN YOUR TARGET, THE NAVY REPORTS THAT WHILE YOUR APPROACH WAS ENTIRELY REASONABLE, THE CHANGES IN YOUR TARGET ARE CONSIDERED MAJOR, AND THEREFORE, THE DATA FROM THE TESTS OF YOUR ORIGINAL TARGET WOULD NOT PROVIDE POSITIVE ASSURANCE THAT THE MODIFIED TARGET WOULD PERFORM SUCCESSFULLY UNDER LAUNCH AND RECOVERY OPERATIONS. ACCORDINGLY, NEW TESTS WOULD BE REQUIRED ON THE MODIFIED TARGET.

AS TO YOUR CONTENTIONS THAT NAVY SHOULD HAVE INSPECTED YOUR SAMPLE TARGET AND THAT YOU WERE RESPONSIVE TO THE IFB DESCRIPTIVE DATA REQUIREMENTS, A NAVY REPORT DATED APRIL 27 READS, IN PART, AS FOLLOWS:

"1. DEL MAR RAISES THE ISSUE AS TO WHY THE NAVY DID NOT INSPECT A DEL MAR SAMPLE TARGET, IN ACCORDANCE WITH THE RIGHT RESERVED IN THE IFB, TO ASSURE ITSELF THAT THE DEL MAR TARGET MET THE REQUIREMENTS OF THE IFB.

ANS. THE PRIOR-TO-AWARD TARGET SAMPLE REQUIREMENT WAS IN ADDITION TO THE REQUIREMENT FOR DESCRIPTIVE LITERATURE TO BE SUBMITTED WITH THE BIDS. FURTHER, NO AMOUNT OF INSPECTION COULD PROVIDE THE "DESIGN DISCLOSURE IN THE FORM OF SPECIFICATIONS AND DRAWINGS IN SUFFICIENT DETAIL TO REVEAL COMPLIANCE WITH THE (SPECIFIED) REQUIREMENTS REQUIRED BY PARAGRAPH 3 (A), PAGE 7 OF AMENDMENT 4 OF THE IFB. THEREFORE, IT WAS CONCLUDED THAT A TRIP TO THE WEST COAST TO VIEW THE SAMPLE WOULD NOT BE JUSTIFIED.

"2. DEL MAR CONTENDS THAT IT RESPONDED ADEQUATELY TO THE DESCRIPTIVE LITERATURE REQUIREMENTS OF THE ALTERNATE SPECIFICATION.

ANS. AMENDMENT 4 REQUIRED PROOF OF CERTAIN CHARACTERISTICS (FLARE FIRING CIRCUITRY DESIGN, MATERIALS, ETC.) WHICH WERE CONSIDERED ESSENTIAL IN DETERMINING THE NATURE OF THE TARGET BEING OFFERED AND DEFINING THE ITEM BEING CONTRACTED FOR IN THE EVENT OF AN AWARD. THESE WERE NOT PROVIDED ADEQUATELY IN DEL MAR'S RESPONSE TO THE IFB. COMPLETE DETERMINATION ON ASSURANCE OF COMPLIANCE WITH THESE REQUIREMENTS CANNOT BE MADE BY ANALYSIS OF PREVIOUSLY SUBMITTED DEL MAR REPORTS AND DRAWINGS, AND THE AMENDMENT CLEARLY SPECIFIED THE REQUIREMENTS AS FAR AS THESE ITEMS WERE CONCERNED.'

FROM THE FOREGOING IT IS APPARENT THAT IT WAS THE NAVY'S BELIEF IT WAS ESSENTIAL, IF THE GOVERNMENT WAS TO OBTAIN THE BENEFITS OF FULL AND FREE COMPETITION, TO PERMIT YOU TO BID YOUR TDU-24A/B TARGET ON AN EQUAL BASIS WITH ANY OTHER BIDDERS WHO MIGHT PROPOSE TO SUPPLY TARGETS MANUFACTURED IN ACCORD WITH THE APPROVED HAYES SPECIFICATIONS, AND THAT AMENDMENT NO. 4 WAS ISSUED SOLELY FOR THAT PURPOSE. IT IS EQUALLY APPARENT THAT IT WAS CONSIDERED NECESSARY TO WAIVE FLIGHT TESTING OF YOUR TARGETS IF THIS OBJECTIVE WAS TO BE OBTAINED, AND THAT BOTH AMENDMENT NO. 4 AND THE SUBSEQUENT WAIVER OF FLIGHT TESTING BY LETTER TO YOU DATED NOVEMBER 6, 1964, WERE ISSUED IN THE MISTAKEN BELIEF THAT YOUR TDU-24A/B TARGET COULD AND WOULD BE MADE COMPATIBLE WITH BOTH THE F4 AND F8 LAUNCHERS WITHOUT MATERIAL CONFIGURATION CHANGES. THIS BELIEF WAS INCORRECT, AND IT MUST BE ASSUMED THAT THE NAVY WOULD NOT HAVE ISSUED AMENDMENT NO. 4 AND/OR GRANTED A WAIVER OF FLIGHT TESTING IF IT HAD BEEN AWARE OF THE FACT THAT MAJOR REVISIONS IN THE CONFIGURATION, REQUIRING ADDITIONAL FLIGHT TESTING, WOULD BE NECESSARY TO OBTAIN COMPATIBILITY WITH BOTH THE F4 AND F8 LAUNCHERS.

WHILE IT WOULD APPEAR TO BE TRUE, AS YOU CONTEND, THAT YOU WERE MISLED INTO SUBMITTING A BID BY THE NAVY'S ADVICE THAT FLIGHT TESTING WOULD BE WAIVED, SUCH A CONCLUSION DOES NOT ANSWER EITHER THE QUESTION OF WHETHER FURTHER COMPETITIVE OPPORTUNITY SHOULD BE ACCORDED TO YOU, OR WHETHER THE CONTRACT AWARDED TO HAYES IS VALID OR INVALID. THE PRIMARY QUESTION THEREFORE APPEARS TO BE WHETHER THE NAVY'S ERRONEOUS WAIVER OF FLIGHT TESTING OPERATES TO DEPRIVE THE GOVERNMENT OF THE BENEFITS OF FULL AND FREE COMPETITION, OR WHETHER SUCH ERRORS DEPRIVED YOU OF A RIGHT TO COMPETE ON AN EQUAL BASIS AGAINST HAYES AND THE OTHER BIDDERS WHO SUBMITTED BIDS BASED UPON FURNISHING TARGETS IN ACCORD WITH THE HAYES SPECIFICATIONS.

IT IS OUR OPINION THAT SUCH DETRIMENT TO YOU OR TO THE GOVERNMENT CAN BE SHOWN ONLY IF YOU WERE, IN FACT, IN A POSITION TO COMPETE ON AN EQUAL BASIS WITH BIDDERS OFFERING TO COMPLY WITH THE HAYES SPECIFICATION, AND IF YOU WERE PRECLUDED FROM SO COMPETING BY THE ERRONEOUS ACTION OF THE NAVY IN EITHER ISSUING AMENDMENT NO. 4, OR IN ERRONEOUSLY WAIVING FLIGHT TESTING, OR BY BOTH. WE FAIL TO SEE THAT THE RECORD WOULD SUPPORT SUCH A CONCLUSION. OBVIOUSLY, ALL OTHER BIDDERS WERE OFFERING TO FURNISH TARGETS BUILT TO SPECIFICATIONS DERIVED FROM TARGETS WHICH HAD ALREADY MET ALL FLIGHT TEST REQUIREMENTS. YOU WERE THEREFORE IN A POSITION WHERE YOU SHOULD HAVE BEEN PERMITTED TO SUBMIT A BID PURSUANT TO AMENDMENT NO. 4 ONLY IF YOUR TDU-24A/B TARGETS HAD IN FACT PASSED ALL FLIGHT TEST REQUIREMENTS AND IF YOU WERE OFFERING TO SUPPLY TARGETS WITH THE SAME MATERIAL CHARACTERISTICS AS THE TDU-24A/B. CLEARLY THIS WAS NOT THE CASE, AND TO THE EXTENT THAT AMENDMENT NO. 4 OR THE LETTER OF NOVEMBER 6, 1964, MIGHT BE CONSTRUED TO RELIEVE YOU OF COMPLIANCE WITH MATERIAL REQUIREMENTS APPLICABLE TO OTHER BIDDERS, THEY WOULD NECESSARILY BE CONSIDERED AS CONFERRING AN UNFAIR COMPETITIVE ADVANTAGE UPON YOU. SINCE IT IS THE NAVY'S POSITION THAT THE CONFIGURATION OF THE MODIFIED TARGETS WHICH YOUR BID PROPOSED TO FURNISH IS SUFFICIENTLY DIFFERENT FROM THE TDU-24A/B AS TO PRECLUDE A DETERMINATION, WITHOUT FLIGHT TESTING, THAT SUCH TARGETS ARE RESPONSIVE TO, AND ACCEPTABLE UNDER, THE INVITATION, WE MUST CONCLUDE THAT AN AWARD COULD NOT PROPERLY HAVE BEEN MADE TO YOU AND THAT REJECTION OF YOUR BID WAS PROPER.

THERE REMAINS FOR CONSIDERATION WHETHER THE ACTION OF THE NAVY IN AWARDING A CONTRACT TO HAYES, FOLLOWING REJECTION OF YOUR BID, WAS PROPER. IN ESSENCE, YOUR ARGUMENT AGAINST THE PROPRIETY OF SUCH AWARD IS BASED UPON CONTENTIONS THAT NAVY EITHER KNEW OR SHOULD HAVE KNOWN THAT YOU COULD NOT FURNISH A TARGET WHICH WAS COMPATIBLE WITH BOTH THE F4 AND F8 LAUNCHERS WITHOUT MATERIALLY CHANGING THE CONFIGURATION OF YOUR TDU-24A/B TARGET; THAT YOU RELIED UPON NAVY'S ADVICE OF NOVEMBER 6, 1964, THAT FLIGHT TESTING WOULD BE WAIVED; THAT YOU DESIGNED AND DEVELOPED A NEW CONFIGURATION COMPATIBLE WITH BOTH THE F4 AND F8 LAUNCHERS IN RELIANCE UPON SUCH ADVICE; AND THAT SUCH ACTION IN RELIANCE UPON NAVY'S ADVICE CONFERS A RIGHT UPON YOU TO HAVE YOUR NEWLY DEVELOPED TARGET CONSIDERED FOR THE INSTANT PROCUREMENT (PRESUMABLY AFTER FLIGHT TESTING), AND PRECLUDES NAVY FROM AWARDING A VALID CONTRACT TO HAYES AT ITS HIGHER BID PRICE.

WHETHER THE NAVY WAS, OR WAS NOT, JUSTIFIED IN AWARDING A CONTRACT TO HAYES MUST BE DETERMINED AS OF THE TIME OF SUCH AWARD AND IN CONSIDERATION OF THE CIRCUMSTANCES WHICH EXISTED AT THE TIME OF THE AWARD. THE FACT THAT YOUR TARGETS MAY SINCE HAVE SUCCESSFULLY PASSED ANY OR ALL OF THE FLIGHT TEST REQUIREMENTS IS NOT FOR CONSIDERATION. CLEARLY, IT WAS THE POSITION OF THE NAVY AT TIME OF AWARD THAT FLIGHT TESTING WOULD BE REQUIRED TO DETERMINE WHETHER THE MODIFIED TARGET OFFERED BY YOUR BID WAS, OR WAS NOT, ACCEPTABLE. THE QUESTION THEREFORE RESOLVES ITSELF INTO WHETHER THE NAVY WAS OBLIGATED OR REQUIRED, BY REASON OF ITS ERRONEOUS ADVICE ON NOVEMBER 6 THAT FLIGHT TESTING WOULD BE WAIVED, TO FLIGHT TEST YOUR MODIFIED TARGETS BEFORE MAKING AN AWARD AND, IN THE EVENT SUCH TARGETS PASSED THE FLIGHT TESTS, TO EITHER MAKE AN AWARD TO YOU OR TO RESOLICIT BIDS ON A BASIS WHICH WOULD PERMIT YOU TO FURNISH SUCH NEWLY QUALIFIED TARGETS. WE SEE NO JUSTIFIABLE BASIS UPON WHICH THE NAVY COULD PROPERLY HAVE BEEN REQUIRED TO WITHHOLD AN AWARD PENDING SUCH TESTING. INDICATED ABOVE, YOU WERE ENTITLED TO NO MORE THAN AN OPPORTUNITY TO COMPETE ON AN EQUAL BASIS WITH OTHER BIDDERS. BY THE SAME TOKEN, ALL OTHER BIDDERS WERE ENTITLED TO COMPETE ON AN EQUAL BASIS WITH YOU. IT IS THEREFORE APPARENT THAT YOU COULD NOT PROPERLY HAVE BEEN PERMITTED TO QUALIFY YOUR MODIFIED TARGET BY FLIGHT TESTS CONDUCTED AFTER BID OPENING UNLESS ALL OTHER BIDDERS WERE ACCORDED THE SAME OPPORTUNITY. CLEARLY THIS WOULD BE IMPRACTICABLE UNLESS THE INVITATION, IN AMENDMENT NO. 4 OR ELSEWHERE, HAD SO ADVISED ALL BIDDERS PRIOR TO BID OPENING. THIS IT DID NOT DO, AND WE FAIL TO SEE HOW THE ERRONEOUS WAIVER OF FLIGHT TESTING, OR YOUR RELIANCE UPON SUCH ERROR, COULD OVERCOME SUCH DEFICIENCY. WE MUST THEREFORE CONCLUDE THAT THERE WAS NO OBLIGATION ON THE PART OF THE NAVY TO WITHHOLD AN AWARD UNTIL YOUR MODIFIED TARGETS WERE FLIGHT TESTED.

IT NECESSARILY FOLLOWS THAT WE FIND NO BASIS UPON WHICH TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED TO HAYES, AND YOUR PROTEST AGAINST SUCH AWARD MUST THEREFORE BE DENIED.