B-157704, DEC. 14, 1965

B-157704, DEC. 14, 1965

TO CAPTIVE SEAL DIVISION:

REFERENCE IS MADE TO YOUR PROTEST BY TELEGRAMS DATED SEPTEMBER 21 AND LETTER DATED SEPTEMBER 30, 1965, WITH ENCLOSURES, AGAINST THE PROPOSAL BY THE DEPARTMENT OF THE NAVY TO CANCEL REQUEST FOR PROPOSALS (RFP) NO. 383/514149/65P, ISSUED MAY 18, 1965, BY THE AVIATION SUPPLY OFFICE (ASO), PHILADELPHIA, PENNSYLVANIA, FOR THE PROCUREMENT OF SOLENOID VALVES FOR CERTAIN GOVERNMENT AIRCRAFT, AND TO PURCHASE THE ITEMS THROUGH FORMAL ADVERTISING.

ASO TECHNICAL PERSONNEL DETERMINED THAT ADEQUATE DATA WAS NOT AVAILABLE ON THE VALVE, WHICH HAS BEEN MANUFACTURED BY HYDRAULIC RESEARCH AND MANUFACTURING COMPANY (HYDRAULIC) DIVISION OF BELL AEROSPACE COMPANY, TO PERMIT COMPETITIVE PROCUREMENT. ACCORDINGLY, AN REP REFERENCING HYDRAULIC'S PART AND STOCK NUMBERS AND REQUESTING SUBMISSION OF A PROPOSAL BY JUNE 8, WAS ISSUED TO HYDRAULIC ONLY, AND IN COMPLIANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1003 THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. IN ADDITION TO A TIMELY PROPOSAL FROM HYDRAULIC, THE PROCUREMENT ACTIVITY RECEIVED A TIMELY UNSOLICITED PROPOSAL FROM YOU OFFERING YOUR PART NO. 65M447-1.

IN BRIEF, YOUR PROTEST STATES THAT PRIOR TO JUNE 8, YOU CONTACTED ASO CONCERNING THE POSSIBILITY OF PROCURING THE VALVE FROM YOU, AND YOU WERE ADVISED THAT ASO HAD NO TECHNICAL DATA OR INFORMATION ON THE VALVE OTHER THAN AS DISCLOSED IN THE RFP. YOU FURTHER STATE THAT YOU VOLUNTEERED TO DEVELOP NECESSARY TECHNICAL DATA AND DOCUMENTATION PROVIDED ASO WOULD MAKE AWARD TO A NEW SOURCE FOR THE ITEM UPON ESTABLISHMENT OF TECHNICAL COMPETENCE, AND YOU ALLEGE THAT YOU ,WERE UNEQUIVOCALLY TOLD AND LED TO BELIEVE" THAT YOU WOULD RECEIVE THE AWARD UPON SUBMISSION OF A LOW BID AND ESTABLISHMENT OF INTERCHANGEABILITY OF YOUR PRODUCT. FINALLY, YOU STATE THAT YOU SUBMITTED A PROPOSAL, WHICH YOU BELIEVE WAS AT LEAST 30 PERCENT LOWER THAN THAT OF HYDRAULIC. BASED ON THESE ALLEGATIONS, YOU CONTEND THAT YOU SHOULD BE AWARDED A CONTRACT FOR THE PROCUREMENT NEEDS. ADDITIONALLY, YOU PROTEST AGAINST ASO'S PROPOSAL TO CANCEL THE RFP AND FORMALLY ADVERTISE FOR BIDS, AND YOU ALLEGE THAT ASO WILL BE USING YOUR CONFIDENTIAL TECHNICAL DATA AND DRAWINGS IN THE ADVERTISEMENT OF THE PROCUREMENT.

THE REPORT OF THE PROCURING ACTIVITY TO THIS OFFICE, WHICH WE ARE REQUIRED TO ACCEPT IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE TO OVERCOME THE PRESUMPTION OF ITS CORRECTNESS, INDICATES THAT WHILE ASO ADVISED YOU THAT YOUR PROPOSAL WOULD BE GIVEN CONSIDERATION TO THE EXTENT POSSIBLE, NO ASSURANCE OF AN AWARD WAS GIVEN TO YOU. ADDITIONALLY, THE CONTRACTING OFFICER REPORTS THAT THE DECISION TO CANCEL THE RFP AND TO ADVERTISE THE PROCUREMENT FOLLOWED THE DISCOVERY BY THE PROCURING ACTIVITY THAT THERE WAS A DOUGLAS (DOUGLAS AIRCRAFT COMPANY, INCORPORATED) SPECIFICATION ON FILE WITH THE DEPARTMENT OF THE NAVY WHICH INCLUDES FULL PERFORMANCE SPECIFICATIONS AND ENVELOPE DRAWINGS AND WHICH ARE ADMINISTRATIVELY CONSIDERED TO BE ADEQUATE FOR USE IN FORMAL ADVERTISING. WHILE THE CONTRACTING OFFICER ACKNOWLEDGES THAT A HYDRAULIC DRAWING FURNISHED BY YOU TO ASO CARRIED A REFERENCE TO THE DOUGLAS SPECIFICATION, THE RECORD INDICATES THAT IN JUNE 1965 THE APPLICABILITY OF THE DOUGLAS SPECIFICATION WAS ALSO BROUGHT TO LIGHT IN THE COURSE OF CORRESPONDENCE BETWEEN ASO AND HYDRAULIC CONCERNING THE DEFICIENCY IN DATA FOR THE VALVE AND THE ACQUISITION OF DATA TO SUPPORT COMPETITIVE PROCUREMENT PROGRAMS. IN THIS CONNECTION, IT FURTHER APPEARS THAT HYDRAULIC FURNISHED A DRAWING TO ASO CITING THE DOUGLAS SPECIFICATION, AND DOUGLAS, PURSUANT TO A CONTRACT FOR THE FURNISHING OF DATA CONCERNING CERTAIN DOUGLAS-CONTROLLED PARTS, FURNISHED A DATA SHEET FOR THE VALVE INDICATING THAT THE ITEM WAS MANUFACTURED TO THE DOUGLAS SPECIFICATION, AND DOUGLAS, PURSUANT TO A CONTRACT FOR THE FURNISHING OF DATA CONCERNING CERTAIN DOUGLAS CONTROLLED PARTS, FURNISHED A DATA SHEET FOR THE VALVE INDICATING THAT THE ITEM WAS MANUFACTURED TO THE DOUGLAS SPECIFICATION WHICH WAS ALREADY IN THE POSSESSION OF THE DEPARTMENT OF THE NAVY. IT IS THE POSITION OF THE PROCURING ACTIVITY, THEREFORE, THAT SINCE THERE ARE AVAILABLE ADEQUATE SPECIFICATIONS FOR THE ITEM WHICH THE GOVERNMENT HAS A RIGHT TO USE, AND SINCE THE PROCUREMENT CAN BE TIMELY EFFECTED BY FORMAL ADVERTISING, THERE IS NO AUTHORITY TO NEGOTIATE A CONTRACT WITH EITHER YOU OR HYDRAULIC. ACCORDINGLY, THE CONTRACTING OFFICER HAS DETERMINED THAT THE RFP SHOULD BE CANCELED AND THE PROCUREMENT EFFECTED BY FORMAL ADVERTISING, THE ADVERTISEMENT TO BE BASED ON THE DOUGLAS SPECIFICATION IN THE DEPARTMENT'S FILES AND NOT ON ANY DATA FURNISHED BY YOU.

THE APPLICABLE PROCUREMENT STATUTE, 10 U.S.C. 2304, REQUIRES THE USE OF FORMAL ADVERTISING FOR THE PROCUREMENT OF PROPERTY AND SERVICES, WITH CERTAIN EXCEPTIONS IN WHICH NEGOTIATION MAY BE EMPLOYED, INCLUDING CASES IN WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION. IN IMPLEMENTATION OF THE STATUTE ASPR 2-102.1 (A) REQUIRES PROCUREMENT BY FORMAL ADVERTISING WHENEVER FEASIBLE AND PRACTICABLE EVEN THOUGH THE CONDITIONS AND CIRCUMSTANCES MIGHT OTHERWISE JUSTIFY NEGOTIATION. A DETERMINATION TO NEGOTIATE WITH A SOLE SOURCE, AS WAS ORIGINALLY CONTEMPLATED BY ASO IN THE INSTANT PROCUREMENT, MUST BE SUPPORTED BY AN ADMINISTRATIVE FINDING SETTING FORTH THE BASIS FOR SUCH ACTION. SEE 10 U.S.C. 2304 (A) (10) AND ASPR 3-210.

WHILE IT WOULD APPEAR, THAT THE RFP WAS ISSUED IN GOOD FAITH TO HYDRAULIC AS A SOLE SOURCE IN THE HONEST BELIEF THAT ADEQUATE SPECIFICATIONS TO PERMIT COMPETITIVE PROCUREMENT DID NOT EXIST, THE SUBSEQUENT DISCLOSURE OF THE AVAILABILITY OF SPECIFICATIONS WHICH ARE ADMINISTRATIVELY CONSIDERED TO BE ADEQUATE FOR FORMAL ADVERTISING REQUIRES, IN OUR OPINION, THE CANCELLATION OF THE RFP AND FORMAL ADVERTISEMENT OF THE PROCUREMENT, SINCE THERE IS NO LONGER A VALID BASIS FOR NEGOTIATION BASED UPON A SOLE SOURCE DETERMINATION, AND TIME PERMITS THE USE OF FORMAL ADVERTISING. THE ACTION PROPOSED BY THE DEPARTMENT OF THE NAVY, THEREFORE, IS IN KEEPING WITH THE PROVISIONS OF THE PROCUREMENT STATUTE AND REGULATIONS.