B-156605, SEP. 21, 1965

B-156605: Sep 21, 1965

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 22. BASICALLY IT IS YOUR CONTENTION THAT SUCH NEGOTIATION OF THE PROCUREMENT WITH BENDIX IS NOT IN THE BEST INTEREST OF THE GOVERNMENT BECAUSE YOUR FIRM IS IN A POSITION "TO OFFER A COMPETITIVE BID FOR EQUIPMENT ON A FORM. THE PERTINENT FACTS AND CIRCUMSTANCES LEADING UP TO THE AWARD OF THE CONTRACT (NO.AF 33 (657) - 14610) TO BENDIX CORPORATION ARE ADMINISTRATIVELY REPORTED AS FOLLOWS: "THE ACTION IN THIS CASE INVOLVES A QUANTITY OF AN/ASN-46A NAVIGATIONAL COMPUTERS UNDER REQUEST FOR PROPOSALS ASD-1758-WHA ISSUED BY AERONAUTICAL SYSTEMS DIVISION. THEAN/ASN-46A AIR NAVIGATIONAL COMPUTER SYSTEM IS REQUIRED FOR INSTALLATION IN PRODUCTION AIRCRAFT FOR THE AIR FORCE AND NAVY.

B-156605, SEP. 21, 1965

TO GENERAL PRECISION, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF APRIL 22, 1965, AND TO YOUR SUPPLEMENTAL LETTER OF MAY 3, 1965, PROTESTING AGAINST THE PROCUREMENT OF A QUANTITY OF NAVIGATIONAL COMPUTER SYSTEMS BY THE AIR FORCE BY NEGOTIATION WITH BENDIX CORPORATION ON A SOLE SOURCE BASIS, AS ANNOUNCED IN THE COMMERCE BUSINESS DAILY ON APRIL 7, 1965.

BASICALLY IT IS YOUR CONTENTION THAT SUCH NEGOTIATION OF THE PROCUREMENT WITH BENDIX IS NOT IN THE BEST INTEREST OF THE GOVERNMENT BECAUSE YOUR FIRM IS IN A POSITION "TO OFFER A COMPETITIVE BID FOR EQUIPMENT ON A FORM, FIT, AND FUNCTION INTERCHANGEABLE BASIS AT THE COMPONENT BLACK BOX (UNIT) LEVEL, AND THAT OUR OFFERED EQUIPMENT HAD RECEIVED FLIGHT TEST EVALUATION.'

THE PERTINENT FACTS AND CIRCUMSTANCES LEADING UP TO THE AWARD OF THE CONTRACT (NO.AF 33 (657) - 14610) TO BENDIX CORPORATION ARE ADMINISTRATIVELY REPORTED AS FOLLOWS:

"THE ACTION IN THIS CASE INVOLVES A QUANTITY OF AN/ASN-46A NAVIGATIONAL COMPUTERS UNDER REQUEST FOR PROPOSALS ASD-1758-WHA ISSUED BY AERONAUTICAL SYSTEMS DIVISION, WRIGHT-PATTERSON AIR FORCE BASE, OHIO. THEAN/ASN-46A AIR NAVIGATIONAL COMPUTER SYSTEM IS REQUIRED FOR INSTALLATION IN PRODUCTION AIRCRAFT FOR THE AIR FORCE AND NAVY. THE SYSTEM CONSISTS OF A COMPUTER, A COMPUTER CONTROL AND A GROUND SPEED INDICATOR. THE QUANTITIES REQUIRED UNDER THIS PROCUREMENT COVER THE FY 65 PRODUCTION SUPPORT.

"2. THE ISSUE INVOLVED IN THIS PROTEST CONCERNS THE PLACEMENT OF A CONTRACT UNDER SOLE SOURCE NEGOTIATIONS CONDUCTED WITH ECLIPSE PIONEER DIVISION OF BENDIX CORPORATION FOR THE TOTAL FY 65 REQUIREMENT. INITIALLY, IT HAD BEEN PLANNED TO PROCURE ONLY THOSE LEAD TIME QUANTITIES REQUIRED TO SUPPORT FY 65 AIRCRAFT PRODUCTION, ON THIS BASIS FROM ECLIPSE- PIONEER. THIS PLAN WAS BASED UPON THE CAPABILITY OF ECLIPSE-PIONEER TO DELIVER A PROVEN RELIABLE ITEM IN LESS TIME THAN WOULD BE REQUIRED UNDER COMPETITIVE PROCUREMENT PROCEDURES. THE BALANCE OF THE FY 65 QUANTITY WAS TO BE PROCURED UNDER A TWO-STEP COMPETITIVE PROCUREMENT.

"3. ECLIPSE-PIONEER WOULD HAVE DELIVERED UNDER THE ABOVE PLANNED SOLE SOURCE PORTION OF THE FY 65 REQUIREMENT THE AN/ASN-46 AIR NAVIGATIONAL COMPUTER SYSTEM. THIS IS AN EARLIER VERSION OF THE SYSTEM IDENTIFIED IN PARAGRAPH 1; AND AT THE TIME OF THE DECISION TO PURSUE THIS COURSE OF ACTION, THE AN/ASN-46 WAS THE ONLY ACCEPTABLE ITEM FOR INSTALLATION IN THE F-4 TACTICAL AIRCRAFT. CONCURRENTLY WITH THE PROCESSING OF DOCUMENTATION FOR AUTHORITY TO NEGOTIATE THE SOLE SOURCE PORTION WITH ECLIPSE-PIONEER, A COMPETITIVE PROCUREMENT CALLING FOR TECHNICAL PROPOSALS TO BE RECEIVED FOR THE BALANCE OF THE FY 65 REQUIREMENT WAS INITIATED AND RELEASED TO INDUSTRY AND THE LETTER REQUEST FOR TECHNICAL PROPOSALS (LRTP) CALLED FOR DELIVERY OF THE AN/ASN-46. THIS EARLIER VERSION HAS A LOWER ACCURACY RELIABILITY AND IS THEREFORE LESS EFFICIENT THAN THE AN/ASN-46A; AND ALTHOUGH THE REQUEST FOR TECHNICAL PROPOSAL UNDER EXHIBIT B THERETO REQUESTED BIDDERS TO COVER PROBLEM AREAS GOING TO SYSTEM ACCURACY WITHIN CERTAIN NAVIGATIONAL RANGES, THERE WAS NO SPECIFIC REQUIREMENT SPECIFIED SO THAT SUCH ACCURACY COULD BE EXPECTED TOBE PROPOSED BY FIRMS BEING SOLICITED.

"4. DURING THE SOLICITATION PERIOD FOR THE COMPETITIVE QUANTITY AND PRIOR TO AWARD OF THE LEAD TIME QUANTITY ON THE AN/ASN-46, THE AN/ASN 46A AN IMPROVED ECLIPSE-PIONEER PRODUCT, AND A COMPETITIVE PRODUCT OF GENERAL PRECISION, THE MINAC II, WERE FLIGHT TESTED; AND BOTH PRODUCTS PROVED SUPERIOR TO THE ITEM THEN PLANNED TO BE PROCURED FOR FY 65 (AN/ASN-46). BASED UPON THIS IMPORTANT INFORMATION, IT BECAME ESSENTIAL TO CONSIDER THE ADVISABILITY OF DISCONTINUING THE PROCUREMENT PLAN FOR FY 65 QUANTITIES OUTLINED ABOVE. BECAUSE OF THE IMPORTANCE OF OBTAINING THE IMPROVED VERSION PROVIDING GREATER ACCURACY, IT WAS DETERMINED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT TO PROCURE THE IMPROVED ITEM FOR FY 65.

"5. THE AIR NAVIGATIONAL COMPUTER SYSTEM INSTALLED IN THE F-4 AIRCRAFT REQUIRES COMPLETE TESTING ON BOTH A COMPONENT AND SYSTEM BASIS PRIOR TO PRODUCTION APPROVAL. THE IMPROVED ECLIPSE-PIONEER VERSION (AN/ASN-46A) USES TWO OF THE COMPONENTS PREVIOUSLY TESTED AND USED IN THE OLDER VERSION (AN/ASN-46). THE TESTING REQUIREMENTS FOR THE ECLIPSE-PIONEER ITEM WERE THEREFORE CONSIDERABLY LESS THAN REQUIRED FOR A COMPLETELY NEW SYSTEM. THE MINAC II HAD NOT BEEN SUBJECTED TO THIS DEGREE OF TESTING. THIS DIFFERENCE WAS HIGHLY IMPORTANT TIME WISE IN THE CONSIDERATIONS GIVEN TO PROCUREMENT OF THE FY 65 QUANTITIES BECAUSE OF THE NECESSITY OF MAINTAINING PRODUCTION SCHEDULES OF THIS ITEM FOR INSTALLATION IN PRODUCTION AIRCRAFT. THIS FACTOR AND THE IMPORTANCE TO AIR FORCE OPERATIONS OF PROVIDING IN ITS NEW PRODUCTION AIRCRAFT A MORE ACCURATE AIR NAVIGATIONAL COMPUTER SYSTEM THAN HAD BEEN ANTICIPATED FOR FY 65, CARRIED CONSIDERABLE WEIGHT IN THE DECISION CONCERNING PROCUREMENT OF THE FY 65 AIR NAVIGATIONAL COMPUTER SYSTEM REQUIREMENT.

"6. USAF HEADQUARTERS ALSO CONSIDERED THE FACTOR OF INTERCHANGEABILITY IN CONNECTION WITH THIS PROCUREMENT. THE DEGREE OF INTERCHANGEABILITY AVAILABLE BETWEEN COMPONENTS OF A SYSTEM BEARS UPON THE COST OF MAINTENANCE AND AIRCRAFT UTILIZATION AND MUST BE CONSIDERED IN SELECTION OF A NEW SYSTEM. IT WAS ESSENTIAL THAT WE TAKE INTO CONSIDERATION IN REGARD TO THIS PROCUREMENT THE AN/ASN-46 SYSTEM INSTALLED IN PRESENT F-4 AIRCRAFT NOW IN THE AIR FORCE OPERATIONAL INVENTORY. ECLIPSE-PIONEER WAS ABLE TO ASSURE COMPLETE BLACK BOX INTERCHANGEABILITY BETWEEN THE SYSTEMS IT HAD DESIGNED FOR USE IN THE F-4 AIRCRAFT (AN/ASN-46 AND AN/ASN-46A). THE NEED FOR COMPONENT INTERCHANGEABILITY CANNOT BE QUESTIONED. THE LACK OF IT COULD RESULT IN SUBSTANTIAL COST INCREASES AS WELL AS DEGRADATION OF OPERATIONAL CAPABILITY IF THE COMPONENTS ARE NOT INTERCHANGEABLE. THE DISPERSAL OF THE F-4 AIRCRAFT TO VARIOUS ASSIGNMENTS OVERSEAS AND AT VARIOUS LOCATIONS WITHIN THE U.S. NECESSITATES THAT SYSTEMS PROCURED FOR INSTALLATION IN AIRCRAFT HAVE THIS DEGREE OF INTERCHANGEABILITY TO AVOID EXCESSIVE STOCKAGE OF PARTS AND COMPONENTS, TO AVOID UNNECESSARY COSTS AND TRAINING OF PERSONNEL, AND TO ASSURE THE FLEXIBILITY OF ASSIGNING AIRCRAFT ON A ROTATIONAL BASIS WITHOUT THE BURDEN OF UNNECESSARY LOGISTIC SUPPORT EFFORT WHERE INTERCHANGEABILITY CANNOT BE PROVIDED. ALTHOUGH GENERAL PRECISION CONTENDS IT COULD FURNISH ITS MINAC II MEETING THIS INTERCHANGEABILITY REQUIREMENT, IT WAS ONLY AFTER ISSUANCE OF THE LETTER CONTRACT TO ECLIPSE-PIONEER HAD BEEN AUTHORIZED AND THE PROCUREMENT FOR FY 65 REQUIREMENTS HAD BEEN SYNOPSIZED IN THE COMMERCE BUSINESS DAILY THAT SUCH REPRESENTATIONS WERE MADE TO THIS DEPARTMENT.'

THE CONTRACTING OFFICER ALSO REPORTS:

"F. DIRECTION WAS RECEIVED ON 24 MARCH 1965 FROM AFSC * * * TO PROCURE THE AN/ASN-46A SYSTEM. NO DATA BEING AVAILABLE ON THE IMPROVED COMPUTER OF THE AN/ASN-46A SYSTEM, IT WAS NOT POSSIBLE TO AMEND THE PROCUREMENT DATA PACKAGE, PREVIOUSLY DISTRIBUTED UNDER SUBJECT RFPS, IN ORDER TO MAKE THE IMPROVED COMPUTER A PART OF THE COMPETITIVE PROCUREMENT. INTERFACE CONSIDERATIONS AND LACK OF DATA ALSO PRECLUDED THE PROCUREMENT OF THE SEPARATE COMPONENTS OF THE SYSTEM FROM DIFFERENT SUPPLIERS. THE RFPS WERE THEREFOR CANCELLED ON 31 MARCH 1965.

"G. THE 10 U.S.C. 2304 (A) (14) DANDF (ON THE AN/ASN 46 SYSTEM) WAS RETURNED FROM WASHINGTON WITHOUT ACTION ON 2 APRIL 1965. HAVING BEEN NOTIFIED IN ADVANCE OF THIS IMPENDING ACTION, ASWVA HAD PREPARED A DANDF UNDER 10 U.S.C. 2304 (A) (10) (XIII) FOR THE PROCUREMENT OF THE ENTIRE FY 65 REQUIREMENT FROM ECLIPSE PIONEER WHICH WAS APPROVED ON 1 APRIL 1965. AUTHORIZATION FOR THE USE OF A LETTER CONTRACT WAS ALSO GRANTED ON 1 APRIL 1965. THE DECISION TO PROCEED IN THIS MANNER WAS PREDICATED ON THE FOLLOWING FACTORS:

"/1) THE MINIMUM PRODUCTION AND QUALIFICATION LEAD TIME REQUIRED FOR THE AN/ASN-46A IS SIX MONTHS. THE F/RF-4 SPO CAN SUPPORT AIRCRAFT INSTALLATION REQUIREMENTS WITH CONTRACTOR FURNISHED EQUIPMENT ONLY THROUGH SEPTEMBER 1965. IT IS THEREFOR MANDATORY THAT A CONTRACT BE PLACED IN APRIL 1965 IN ORDER TO MEET OCTOBER AIRCRAFT INSTALLATION REQUIREMENTS. (SEE ASZM ATTACHMENT HERETO)

"/2) AS MENTIONED ABOVE, THE ECLIPSE PIONEER COMPUTER IS DESIGNED FOR USE WITH PRESENT AN/ASN-46 COMPONENTS WHICH ARE FULLY QUALIFIED. IT IS THEREFOR NECESSARY TO QUALIFY ONLY THE COMPUTER WHICH CAN BE DONE WITHIN THE SIX MONTH LEAD TIME. A NEW SUPPLIER WOULD FIND IT NECESSARY TO QUALIFY AN ENTIRE SYSTEM.

"/3) ECLIPSE PIONEER IS CURRENTLY IN PRODUCTION ON THE AN/ASN-46 SYSTEM, TWO OF THE COMPONENTS OF WHICH WILL BE USED IN THE AN/ASN-46A.

"/4) OTHER CONSIDERATIONS ASIDE, THE TIME REQUIRED TO PREPARE AND PROCESS THE PROCUREMENT DOCUMENTATION NECESSARY FOR THE AWARD OF A CONTRACT TO A NEW SUPPLIER PRECLUDES THE PLACEMENT OF SUCH A CONTRACT BEFORE JUNE 1965 MAKING IT IMPOSSIBLE TO MEET THE MANDATORY OCTOBER DELIVERY DATE.

"/5) THE REQUIREMENT FOR FY 65 SPARES QUANTITIES OF THE AN/ASN-46 IS MARKED WITH PRIORITY DESIGNATOR 1-6 AND REQUIRES IMMEDIATE PROCUREMENT ACTION.'

UNDER THE PROVISIONS OF 10 U.S.C. 2304 (A) (10) PURCHASES AND CONTRACTS MAY BE NEGOTIATED IF IT IS IMPRACTICABLE TO OBTAIN COMPETITION. IMPLEMENTING THAT AUTHORITY, ARMED SERVICES PROCUREMENT REGULATION 3-210.2 SETS FORTH ILLUSTRATIVE CIRCUMSTANCES UNDER WHICH THE AUTHORITY T NEGOTIATE MAY BE USED. UNDER SUBPARAGRAPH (I) CONTRACTS MAY BE NEGOTIATED WHERE THE SUPPLIES CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM (SOLE SOURCE OF SUPPLY) AND UNDER SUBPARAGRAPH (XIII) NEGOTIATION IS PERMITTED WHEN IT IS IMPOSSIBLE TO DRAFT, FOR SOLICITATION OF BIDS, ADEQUATE SPECIFICATIONS OR ANY OTHER ADEQUATELY DETAILED DESCRIPTION OF THE REQUIRED SUPPLIES. PURSUANT TO ASPR 3 210.3 THE CONTRACTING OFFICER IN THE INSTANT PROCUREMENT HAS MADE THE REQUIRED DETERMINATION AND FINDINGS THAT THE IMPROVED NAVIGATIONAL COMPUTER SYSTEMS SHOULD BE PROCURED BY NEGOTIATION WITH BENDIX FOR THE REASONS QUOTED ABOVE. SUCH REASONS AS SUPPORTED BY THE REPORTED FACTS OF RECORD CONVINCINGLY ESTABLISH THAT, DUE TO THE CRITICAL TIME FACTOR INVOLVED, ADEQUATE SPECIFICATIONS FOR EVALUATING QUOTATIONS FROM OTHER SOURCES FOR ALTERNATE SYSTEMS COULD NOT HAVE BEEN DRAFTED ON THE IMPROVED SYSTEM SO AS TO MEET THE MANDATORY DELIVERY SCHEDULE. WE FIND NOTHING IN THE RECORD TO SUPPORT A CONCLUSION THAT THE DETERMINATION MADE BY THE AIR FORCE TO NEGOTIATE ON A SOLE SOURCE BASIS WAS ARBITRARY OR UNWARRANTED UNDER THE CIRCUMSTANCES.

SINCE THE AWARD ACTIONS TAKEN HERE WERE SUPPORTED BY FINDINGS IN ACCORD WITH THE PERTINENT LAW AND REGULATIONS, AND SINCE 10 U.S.C. 2310/B) SPECIFICALLY PROVIDES THAT THE FINDINGS SUPPORTING DETERMINATIONS TO NEGOTIATE UNDER 10 U.S.C. 2304 (A) (10) SHALL BE FINAL, WE MUST CONCLUDE THAT THE INSTANT PROCUREMENT IS NOT SUBJECT TO QUESTION BY OUR OFFICE, AND YOUR PROTEST IS THEREFORE DENIED.

WITH REGARD TO THE PROCUREMENT OF THE REQUIREMENTS FOR THIS EQUIPMENT FOR THE FISCAL YEARS 1966 AND 1967, THE DEPARTMENT OF THE AIR FORCE REPORTS THAT IT IS DEVELOPING AN APPROPRIATE COMPETITIVE PROCUREMENT PACKAGE FOR FUTURE USE IN OBTAINING THAT PORTION OF THE SYSTEMS NOT REQUIRED TO BE PURCHASED FROM BENDIX TO MEET NEEDS OF COMPELLING AND UNUSUAL URGENCY (ASPR 3-202).