B-158377, MAY 19, 1966

B-158377: May 19, 1966

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THESE DATA MODEMS WERE TO BE COMPATIBLE WITH THE STELMA T-1200A DATA MODEMS PRESENTLY EMPLOYED IN THE INTERIM DCS AUTODIN (PACIFIC) AND WERE TO BE CAPABLE OF OPERATING AT 600. DELIVERY AT THE SITE WAS TO BEGIN NO LATER THAN FEBRUARY 1. THE DELIVERY SCHEDULE WAS SUBSEQUENTLY AMENDED SO THAT DELIVERY WOULD BEGIN IN APRIL. THE ONLY KNOWN DATA MODEM THAT MEETS THE TECHNICAL REQUIREMENTS AND THAT CAN BE MADE AVAILABLE WITHIN THE ABOVE STRINGENT TIME FRAME IS THE LENKURT ELECTRIC COMPANY MODEL 26C DATA MODEM. RIXON ELECTRONICS PROTESTS AGAINST THE AWARD OF THE ABOVE CONTRACT ON THE GROUNDS THAT IT WAS NOT MADE IN THE BEST INTERESTS OF THE GOVERNMENT. RIXON CONTENDS THE PROCUREMENT SHOULD HAVE BEEN BY FORMAL ADVERTISING TO INCREASE COMPETITION AND DECREASE THE PRICE OR.

B-158377, MAY 19, 1966

TO RIXON ELECTRONICS, INCORPORATED:

WE REFER TO YOUR LETTER DATED JANUARY 17, 1966, AND SUBSEQUENT CORRESPONDENCE DATED JANUARY 25, 1966, PROTESTING AGAINST THE AWARD OF A SOLE-SOURCE CONTRACT TO THE LENKURT ELECTRIC COMPANY, SAN CARLOS, CALIFORNIA.

THE DEFENSE COMMUNICATIONS AGENCY (DCA) ISSUED A HIGH PRIORITY REQUIREMENT FOR 150 EACH DATA MODEMS IN SUPPORT OF DCA PLAN FOR UPGRADING THE INTERIM AUTODIN SYSTEM FOR SOUTHEAST ASIA. THESE DATA MODEMS WERE TO BE COMPATIBLE WITH THE STELMA T-1200A DATA MODEMS PRESENTLY EMPLOYED IN THE INTERIM DCS AUTODIN (PACIFIC) AND WERE TO BE CAPABLE OF OPERATING AT 600, 1200, AND 2400 BITS PER SECOND. DELIVERY AT THE SITE WAS TO BEGIN NO LATER THAN FEBRUARY 1, 1966. THE DELIVERY SCHEDULE WAS SUBSEQUENTLY AMENDED SO THAT DELIVERY WOULD BEGIN IN APRIL, 1966. IN LETTER DATED OCTOBER 19, 1965, THE ACTING DIRECTOR OF THE LOGISTICS DIRECTORATE, U.S. ARMY STRATEGIC COMMUNICATIONS COMMAND (STRATCOM) RECOMMENDED THE PROCUREMENT BE NEGOTIATED RATHER THAN ADVERTISED AND THE NEGOTIATIONS BE WITH THE LENKURT ELECTRIC COMPANY EXCLUSIVELY. PARAGRAPH THREE OF THIS LETTER STATES THE REASONS FOR THIS RECOMMENDATION AS FOLLOWS:

"BASED UPON TECHNICAL INFORMATION AVAILABLE, THE ONLY KNOWN DATA MODEM THAT MEETS THE TECHNICAL REQUIREMENTS AND THAT CAN BE MADE AVAILABLE WITHIN THE ABOVE STRINGENT TIME FRAME IS THE LENKURT ELECTRIC COMPANY MODEL 26C DATA MODEM, MODIFIED TO OPERATE AT 600 BITS PER SECOND.'

THE LETTER ALSO NOTES THAT MILSTRIP ISSUE PRIORITY DESIGNATOR 02 APPLIES. IN ACCORDANCE WITH THE ABOVE RECOMMENDATION, THE U.S. ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA, AWARDED LETTER CONTRACT NO. DA-36-039-AMC-08940 (E) TO LENKURT ELECTRIC COMPANY ON JANUARY 4,1966.

RIXON ELECTRONICS PROTESTS AGAINST THE AWARD OF THE ABOVE CONTRACT ON THE GROUNDS THAT IT WAS NOT MADE IN THE BEST INTERESTS OF THE GOVERNMENT. SPECIFICALLY, RIXON CONTENDS THE PROCUREMENT SHOULD HAVE BEEN BY FORMAL ADVERTISING TO INCREASE COMPETITION AND DECREASE THE PRICE OR, IN THE ALTERNATIVE, IF NEGOTIATION WAS FOUND TO BE PROPER UNDER THE CIRCUMSTANCES, RIXON SHOULD HAVE BEEN ALLOWED TO SUBMIT A BID INASMUCH AS IT IS A PAST AS WELL AS PRESENT SUPPLIER OF DATA MODEMS FOR THE INTERIM AUTODIN SYSTEM (PACIFIC); ITS EQUIPMENT IS MORE COMPATIBLE WITH THE EQUIPMENT PRESENTLY IN USE; AND BECAUSE RIXON CAN DELIVER ITS EQUIPMENT SOONER THAN LENKURT CAN DELIVER ITS EQUIPMENT.

GENERALLY, SUPPLIES AND SERVICES FOR THE GOVERNMENT ARE PROCURED BY MEANS OF FORMAL ADVERTISING SINCE IT IS FELT THAT THE COMPETITION WHICH RESULTS FROM THIS METHOD WILL PRODUCE A BETTER PRODUCT OR SERVICE FOR THE GOVERNMENT AT A LESSER PRICE. THERE ARE INSTANCES, HOWEVER, WHEN FORMAL ADVERTISING IS NOT PRACTICABLY FEASIBLE, AND THE GOVERNMENT IS, IN SUCH INSTANCES, AUTHORIZED TO NEGOTIATE A PURCHASE OR A CONTRACT. IN THIS REGARD, 10 U.S.C. 2304 (A) (2) PROVIDES AS FOLLOWS:

"PURCHASES OF AND CONTRACTS FOR PROPERTY OR SERVICES COVERED BY THIS CHAPTER SHALL BE MADE BY FORMAL ADVERTISING IN ALL CASES IN WHICH THE USE OF SUCH METHOD IS FEASIBLE AND PRACTICABLE UNDER THE EXISTING CONDITIONS AND CIRCUMSTANCES. IF USE OF SUCH METHOD IS NOT FEASIBLE AND PRACTICABLE, THE HEAD OF AN AGENCY, * * * MAY NEGOTIATE SUCH A PURCHASE OR CONTRACT, IF * * * THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO ADVERTISING * * *.'

ALTHOUGH SECTION 3-202 OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH AUTHORIZES USE OF THE ABOVE STATUTE, LIMITS THE USE OF THE "PUBLIC EXIGENCY" EXCEPTION TO CASES WHERE THE GOVERNMENT WOULD BE SERIOUSLY INJURED IF THE SUPPLIES OR SERVICES WERE NOT FURNISHED BY A CERTAIN DATE, ITS USE IS PERMITTED WHEN THEY COULD NOT BE PROCURED BY THAT DATE BY MEANS OF FORMAL ADVERTISING. IN THIS REGARD, STRATCOM FELT THAT LENKURT WAS THE ONLY CONTRACTOR CAPABLE OF MEETING THE GOVERNMENT'S DELIVERY REQUIREMENTS. THIS DECISION WAS MADE BECAUSE THE LENKURT DATA MODEM HAD BEEN OPERATED ON A TEST BASIS WITH THE STELMA T 1200A DATA MODEM AND WITH THE GOVERNMENT-OWNED CRYPTOGRAPHIC EQUIPMENT AND NO MODIFICATION OF ANY KIND WAS REQUIRED. FURTHERMORE, THE UNIVAC COMPANY HAS STATED ITS COMPUTER MODEL NO. 1004/DLT-6 WILL INTERFACE WITH THE DATA MODEMS BEING PROCURED WITH ONLY MINOR MODIFICATION. ON THE OTHER HAND, THE RIXON EQUIPMENT USES VESTIGIAL SIDEBAND AMPLITUDE MODULATION FOR TRANSMISSION, WHICH IS NOT COMPATIBLE WITH THE FREQUENCY SHIFT MODULATION OF THE STELMA T-1200A EQUIPMENT PRESENTLY IN USE IN THE INTERIM AUTODIN PACIFIC SYSTEM. IN ADDITION, WE HAVE BEEN INFORMED THE RIXON EQUIPMENT WOULD HAVE TO BE COMPLETELY REDESIGNED TO MEET THE TECHNICAL REQUIREMENTS OF THE PROCUREMENT. MOREOVER, AS NOTED ABOVE, STRATCOM CITED AN ISSUE PRIORITY DESIGNATOR OF 02 UNDER THE UNIFORM MATERIAL ISSUE PRIORITY SYSTEM. WHEN THIS IS THE CASE, ASPR 3-202.2 (VI) PROVIDES THAT THE "PUBLIC EXIGENCY" EXCEPTION TO FORMAL ADVERTISING MAY BE USED, NO FURTHER JUSTIFICATION BEING REQUIRED.

WHILE THE STATUTE (10 U.S.C. 2304 (G) ( AND THE REGULATION (ASPR 3 202.2) REQUIRE THAT EVEN WHEN AUTHORITY EXISTS TO NEGOTIATE PROCUREMENTS, PROPOSALS SHOULD BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED, THE "PUBLIC EXIGENCY" JUSTIFICATION FOR NEGOTIATION CLOTHES THE CONTRACTING OFFICER WITH A CONSIDERABLE DEGREE OF DISCRETION IN DETERMINING THE EXTENT OF NEGOTIATION CONSISTENT WITH THE EXIGENCY OF THE SITUATION. SEE B 155820. IN THIS CASE, IF RIXON HAD BEEN ALLOWED TO REDESIGN ITS EQUIPMENT, AN EQUAL OPPORTUNITY WOULD HAVE HAD TO BE GIVEN TO OTHER MANUFACTURERS TO DO THE SAME. STRATCOM FELT THE ADDITIONAL TIME INCIDENT TO PROCURING A REDESIGNED ITEM COULD NOT BE TOLERATED IN THIS URGENT PROCUREMENT.

WE HAVE FOUND NO EVIDENCE OF AN ARBITRARY OR CAPRICIOUS ABUSE OF DISCRETION BY THE CONTRACTING OFFICER AND, IN VIEW OF THE FACTS AND CIRCUMSTANCES INVOLVED IN THIS CASE, WE MUST DENY YOUR PROTEST.