B-156626, JUN. 8, 1965

B-156626: Jun 8, 1965

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INC.: REFERENCE IS MADE TO YOUR LETTER OF APRIL 14. ESSENTIALLY YOUR PROTEST IS BASED ON THE PREMISE THAT BY SPECIFYING ALUMINUM CONTAINERS OF THE MODULAR DESIGN THE INVITATION UNDULY RESTRICTS COMPETITION TO ONE OR TWO COMPANIES AND THAT THE IFB SHOULD BE BROADENED TO INCLUDE OTHER TYPES OF CONSTRUCTION SUCH AS A "SANDWICH" MATERIAL CONSTRUCTION. THE FACTS AND CIRCUMSTANCES SURROUNDING THE DEVELOPMENT AND SELECTION OF THE ALUMINUM MODULAR DESIGN CONCEPT FOR THE SHILLELAGH MISSILE CONTAINERS IN THIS PROCUREMENT ARE SUMMARIZED BY THE ARMY AS FOLLOWS: "A. TWO ABSOLUTE PREREQUISITES PREVAILED: "/1) A MISSILE CONTAINER THAT MEETS ALL DESIGN REQUIREMENTS WAS REQUIRED TO BE AVAILABLE FOR CONCURRENT SHIPMENT OF THE R AND D MISSILES TO THEIR TEST SITES FOR RELIABILITY TESTS OF MISSILE AND CONTAINER AS A UNIT. "/2) ACCEPTABLE DESIGN PARAMETERS WERE THAT THE CONTAINER BE DURABLE.

B-156626, JUN. 8, 1965

TO SKYDYNE, INC.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 14, 1965, PROTESTING AGAINST ANY AWARD OF A CONTRACT FOR SHILLELAGH MISSILE CONTAINERS UNDER INVITATION FOR BIDS NO. AMC (Z/-01-021-65-1359, ISSUED BY THE ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA, ON MARCH 29, 1965.

THE INVITATION SOLICITED BIDS ON DESIGNATED QUANTITIES OF CONTAINER ASSEMBLIES, ORDNANCE PART NO. 7782587, FOR TRANSPORTING AND STORING THE SHILLELAGH MISSILE, IN ACCORDANCE WITH ATTACHED DRAWINGS AND SPECIFICATIONS DESIGNATING ALUMINUM CONTAINERS OF "MODULAR" TYPE CONSTRUCTION.

ESSENTIALLY YOUR PROTEST IS BASED ON THE PREMISE THAT BY SPECIFYING ALUMINUM CONTAINERS OF THE MODULAR DESIGN THE INVITATION UNDULY RESTRICTS COMPETITION TO ONE OR TWO COMPANIES AND THAT THE IFB SHOULD BE BROADENED TO INCLUDE OTHER TYPES OF CONSTRUCTION SUCH AS A "SANDWICH" MATERIAL CONSTRUCTION, WHICH YOU CONTEND WOULD PROVIDE ALL THE QUALITY AND SERVICEABILITY REQUIREMENTS NEEDED BY THE USING AGENCY.

THE FACTS AND CIRCUMSTANCES SURROUNDING THE DEVELOPMENT AND SELECTION OF THE ALUMINUM MODULAR DESIGN CONCEPT FOR THE SHILLELAGH MISSILE CONTAINERS IN THIS PROCUREMENT ARE SUMMARIZED BY THE ARMY AS FOLLOWS:

"A. THE SHILLELAGH MISSILE CONTAINER DESIGN BEGAN SHORTLY AFTER THE START OF DEVELOPMENT OF THE SHILLELAGH MISSILE SYSTEM IN MID 1959. TWO ABSOLUTE PREREQUISITES PREVAILED:

"/1) A MISSILE CONTAINER THAT MEETS ALL DESIGN REQUIREMENTS WAS REQUIRED TO BE AVAILABLE FOR CONCURRENT SHIPMENT OF THE R AND D MISSILES TO THEIR TEST SITES FOR RELIABILITY TESTS OF MISSILE AND CONTAINER AS A UNIT.

"/2) ACCEPTABLE DESIGN PARAMETERS WERE THAT THE CONTAINER BE DURABLE, LIGHTWEIGHT, ECONOMICAL AND MEET THE OPERATIONAL REQUIREMENTS.

"B. CONTAINER DESIGN WAS FIRST INITIATED BY THE WATERVLIET ARSENAL. WATERVLIET, IN AN EFFORT TO DESIGN A SUITABLE CONTAINER FOR THE SHILLELAGH MISSILE, TESTED A VARIETY OF CONTAINERS USING PLASTIC AND FIBERGLASS AS BASIC MATERIALS. BRITTLENESS AT LOW TEMPERATURE AND POOR SEALING CHARACTERISTICS CAUSED CONSIDERABLE DIFFICULTIES WITH THE FIBERGLASS AND PLASTIC MATERIALS. ALUMINUM MATERIAL DESIGN WAS THEN EMPHASIZED ALTHOUGH RESEARCH IN PLASTICS CONTINUED AS POSSIBLE SECONDARY MATERIAL IN THE EVENT ALUMINUM DID NOT PRODUCE REQUIRED RESULTS AT A REASONABLE COST. MICOM (THEN AOMC) UNDERTOOK A NEW APPROACH FOR A FIBERGLASS OUTER SHELL WITH WATERVLIET CONCURRENTLY REFINING ITS ALUMINUM MODULAR CONCEPT CONTAINER. THE WATERVLIET ALUMINUM DESIGN RESULTED IN THE BEST CANDIDATE FOR ENGINEERING MODEL CONTAINER.

"C. IN OCTOBER 1962, WATERTOWN WAS ASSIGNED THE MISSION OF DEVELOPMENT OF ALL ARMY MISSILE CONTAINERS, NOT JUST THE SHILLELAGH. ACCORDINGLY, THE WATERVLIET MODULAR ALUMINUM CONCEPT (BY THIS TIME DEVELOPED TO A PROMISING DESIGN) AND THE CONTAINER MATERIALS, CONTINUED RESEARCH IN THE PLASTIC AND FIBERGLASS FIELD. IT SHOULD BE NOTED THAT AN ALUMINUM MODULAR CONTAINER BASICALLY SUITABLE FOR THE SHILLELAGH MISSILE WAS THEN IN AN ADVANCED STAGE OF DEVELOPMENT. WATERTOWN WAS OF THE OPINION THAT THE MODULAR CONTAINER MAY BE FURTHER IMPROVED UPON. THE SKYDYNE CONTAINER (UNSOLICITED PROPOSAL) WAS TESTED ON THE PREMISE THAT IT MAY BE AN IMPROVEMENT OVER THE ALUMINUM MODULAR CONTAINER. WATERTOWN ALSO TESTED OTHER CONTAINERS IN SEARCH OF A DESIGN WHICH WOULD IMPROVE THE CONTAINER. IN EARLY 1963 THE SKYDYNE CONTAINER IN QUESTION, TOGETHER WITH NUMEROUS OTHERS, WAS TESTED. SKYDYNE'S "SKY-WRAP" CONTAINER WAS FABRICATED FROM A MULTI-LAYERED (ALUMINUM/PLYWOOD) SHEET BENT AT RIGHT ANGLES TO FORM A FOUR -SIDED ENCLOSURE WITH THE TWO ENDS INSERTED INTO AN "H" EXTRUSION. THIS CONTAINER, AS SUBMITTED, WAS TESTED ON A LIMITED BASIS AT MICOM (REDSTONE) AND REJECTED FOR FURTHER QUALIFICATION TESTING BECAUSE RESONANT FREQUENCY EXCEEDED THE 25 CPS LIMIT OF THE SHILLELAGH CONTAINER. IN ADDITION TO THIS FAILURE THE SKY-WRAP CONTAINER WAS NOT ADAPTABLE TO RAPID PRODUCTION TECHNIQUES SINCE CLOSURE COMPONENTS AND LATCHING FEATURES REQUIRED FURTHER DEVELOPMENT. CLOSURE COMPONENTS WERE MACHINED FROM SOLID STOCK; THE CLOSURE PROPOSED BY SKYDYNE FOR PRODUCTION WOULD HAVE BEEN A DIE CASTING. PRODUCTION OF CASTINGS WOULD HAVE REQUIRED ADDITIONAL TESTING AND DEVELOPMENT TIME. SKYDYNE'S DESIGN WAS NOT ACCEPTABLE IN TWO BASIC AREAS: IT FAILED A REQUIRED TEST AND DID NOT LEND ITSELF TO EASY PRODUCTION WITHOUT FURTHER DEVELOPMENT. DUE TO CONTRACTUAL OBLIGATION OF THE GOVERNMENT TO FURNISH ENGINEERING MODEL CONTAINERS TO THE PRIME MISSILE CONTRACTOR BY SEPTEMBER 1963, THE SELECTION OF AN ENGINEERING MODEL DESIGN HAD TO BE MADE BY JULY 1963. THE MODULAR ALUMINUM CONTAINER PASSED THE REQUIRED TESTS. IT IS OF SIMPLE CONSTRUCTION IN THAT THE ALUMINUM OUTER CONTAINER IS MADE FROM STANDARD ALUMINUM SHEET STOCK, THE ASSOCIATED HARDWARE IS OF ACCEPTABLE DESIGN AND EASILY PRODUCED, AND THE INTERIOR CUSHIONING MATERIAL, FIBERGLASS BATTING, IS OF SIMPLE CONSTRUCTION. THIS ALUMINUM MODULAR CONCEPT DESIGN, AFTER EXHAUSTIVE TESTING, WAS FOUND TO BE THE MOST ACCEPTABLE DESIGN WITHIN THE REQUIRED PARAMETERS. ACCORDINGLY, SPECIFICATION AND DRAWINGS WERE DEVELOPED AND THE PROCUREMENT WAS INITIATED.

"D. IN CONCLUSION:

"/1) THE BASIC DESIGN PARAMETERS GOVERNED AND ALL EFFORTS WERE DIRECTED TO THAT END.

"/2) SEVERAL CONTAINERS WERE TESTED; OF THOSE IN QUESTION THE ALUMINUM MODULAR CONCEPT CONTAINER MET THE CRITERIA. EVEN IF THE "SKY WRAP" DESIGN HAD SUCCESSFULLY PASSED TESTING IN ALL OF THE REQUIRED ENVIRONMENTS, IT WOULD NOT HAVE BEEN AN IMPROVEMENT OVER THE ALUMINUM CONTAINER. PREDICTABLE PRODUCTION DIFFICULTIES IN SKY-WRAP FABRICATION WAS ANOTHER DETERMINING FACTOR SINCE TIME IS OF THE ESSENCE. THE GOVERNMENT WOULD ALSO HAVE BEEN REQUIRED TO INCUR ADDITIONAL COSTS TO QUALIFY THE SKY-WRAP DESIGN.

"4. THE GOVERNMENT'S DECISION, CONSIDERED IN THE LIGHT OF THE MANDATORY DESIGN PARAMETERS, IS BASED ON ITS SELECTING A CONTAINER DESIGN WHICH HAD BEEN PROVEN, TO THE EXCLUSION OF OTHER DESIGNS WHICH HAD NOT BEEN PROVED BY QUALIFICATION TESTS AND WHICH WOULD REQUIRE ADDITIONAL TIME AND FUNDS TO ENGINEER FOR PRODUCTION.'

AS JUSTIFICATION (IN ACCORDANCE WITH PARAGRAPH 2-407.9 (B) (3) (I) AND (II) OF THE ARMED SERVICES PROCUREMENT REGULATION) FOR MAKING AWARD PROMPTLY TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNDER THE INVITATION, THE CONTRACTING OFFICER MADE THE FOLLOWING DETERMINATION AND FINDINGS ON YOUR PROTEST:

"3. SKYDYNE'S PROTEST HAS BEEN REVIEWED AND THE FOLLOWING FACTS ARE SET FORTH:

"A. THE GOVERNMENT HAS SOLE RESPONSIBILITY FOR DEVELOPMENT AND DESIGN OF THE PART BEING PROCURED. THE GOVERNMENT HAS TESTED THE ITEM AND THE DECISION HAS BEEN MADE THAT THE MODULAR CONTAINER IS THE ONE WHICH WILL BEST SUIT ITS NEEDS.

"B. SKYDYNE'S ALLEGATION THAT THERE ARE ONLY ONE OR TWO MANUFACTURERS OF THIS TYPE CONTAINER IS BELIEVED TO BE WITHOUT FOUNDATION IN FACT. IT IS EXPECTED THAT A CONSIDERABLE NUMBER OF FIRMS WHO HAVE THE CAPABILITY TO MAKE THIS TYPE ITEM WILL BID ON THIS INVITATION.

"C. TIME WILL NOT PERMIT THE QUALIFICATION OF ADDITIONAL TYPES OF CONTAINERS AS THE ITEM IS CRITICAL TO THE SHILLELAGH MISSILE PRODUCER'S SCHEDULE AND IS TO BE FURNISHED AS GFE TO HIM. DELIVERY OF THE MISSILES WOULD BE UNDULY DELAYED BY FAILURE TO MAKE AWARD PROMPTLY ON THIS IFB. THE DELIVERY SCHEDULE SET FORTH IN THE INVITATION IS MANDATORY FOR THE FOLLOWING REASONS:

"/1) IF THE CONTRACTOR DOES NOT RECEIVE THE CONTAINERS AS SCHEDULED, IT WILL CAUSE A SHUT DOWN OF HIS PRODUCTION LINE WHICH WILL SERIOUSLY JEOPARDIZE THE SHILLELAGH PROGRAM.

"/2) THE PRIME CONTRACTOR IS HIGHLY RESTRICTED ON STORAGE BY LOS ANGELES COUNTY ORDNANCES.'

REGARDING YOUR STATEMENT THAT ONLY ONE OR TWO COMPANIES COULD QUALIFY UNDER THE IFB, ARMY'S DIRECTOR OF PROCUREMENT AND PRODUCTION HAS REPORTED:

"SUBSEQUENT TO THE PREPARATION OF THE CONTRACTING OFFICER'S DETERMINATION AND FINDINGS, THE BIDS WERE OPENED ON 11 MAY 1965. BID PRICES RANGED FROM $108 TO $620 PER CONTAINER. A TOTAL OF 15 BIDS WERE RECEIVED OF WHICH 14 WERE RESPONSIVE. THE LOW BIDDER WAS ROIS MANUFACTURING COMPANY, PHILADELPHIA, PENNSYLVANIA, AT $108.10 PER CONTAINER. A PREAWARD SURVEY IS BEING INITIATED.'

CONCERNING THE SPECIFICATION IN THE IFB OF CONTAINERS HAVING AN ALUMINUM MODULAR TYPE CONSTRUCTION, IT IS WELL SETTLED THAT THE CONTRACTING AGENCIES OF THE GOVERNMENT HAVE THE PRIMARY RESPONSIBILITY FOR DETERMINING THE GOVERNMENT'S NEEDS AND FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THOSE NEEDS. WHILE SUCH DETERMINATIONS SHOULD INCLUDE CONSIDERATION OF THE SUITABILITY OF ITEMS OF DIFFERING DESIGNS WHICH MAY BE SUBMITTED FOR EVALUATION AND TESTING, THERE IS NO REQUIREMENT THAT A PROCUREMENT BE DELAYED TO PERMIT THE TESTING OF ALL POSSIBLE MATERIALS AND DESIGNS IN ORDER TO DETERMINE THEIR ACCEPTABILITY FOR THE INTENDED USE AND THEIR ADAPTABILITY TO QUANTITY PRODUCTION. IT FOLLOWS THAT, WHILE THE LAW REQUIRING ADVERTISING FOR BIDS AND AWARD OF CONTRACTS TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER CONTEMPLATES FULL AND OPEN COMPETITION, THE FACT THAT A PROSPECTIVE BIDDER MAY BE UNABLE OR UNWILLING TO MEET CERTAIN REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, WHICH HAVE BEEN DETERMINED TO REFLECT OR DESCRIBE THE GOVERNMENT'S NEEDS IS NOT SUFFICIENT TO WARRANT THE CONCLUSION THAT SUCH SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION. IN THIS REGARD WE STATED IN 36 COMP. GEN. 251, 252:

"THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOW IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEED.'

THE RECORD IN THE INSTANT CASE SHOWS THAT, CONTRARY TO YOUR ANTICIPATION, SUBSTANTIAL COMPETITION WAS OBTAINED UNDER THE IFB, AND SUCH COMPETITION APPEARS TO HAVE RESULTED IN A FAIR PRICE FOR CONSTRUCTION OF CONTAINERS FOR THE SHILLELAGH MISSILE IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS AND DRAWINGS. IT FURTHER APPEARS THAT SUCH TYPE OF CONTAINER IS THE ONLY ONE WHICH HAS BEEN COMPLETELY PROVED BY QUALIFICATION TESTS TO SATISFY THE GOVERNMENT'S REQUIREMENTS AND THAT THE URGENT NEED FOR THE ITEM DOES NOT ALLOW SUFFICIENT TIME FOR THE QUALIFICATION OF ADDITIONAL TYPES OF CONTAINERS FOR THIS PROCUREMENT.

ACCORDINGLY, SINCE IT IS NOT APPARENT FROM THE RECORD, AS SET OUT ABOVE, THAT THE ACTION OF THE ADMINISTRATIVE OFFICE IN SPECIFYING A COMPLETELY TESTED ALUMINUM MODULAR TYPE OF CONTAINER WAS ARBITRARY OR CAPRICIOUS OR THAT SUCH A CONTAINER WILL NOT BE SATISFACTORY FOR ITS INTENDED USE, WE DO NOT PERCEIVE ANY LEGAL BASIS UPON WHICH WE COULD OBJECT TO AN AWARD OF A CONTRACT TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNDER THE INVITATION.