B-160119, JAN. 27, 1967

B-160119: Jan 27, 1967

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WIENER AND SCHLEZINGER: REFERENCE IS MADE TO YOUR PROTEST BY TELEGRAM DATED SEPTEMBER 22. THE FOUR BIDS RECEIVED BY THE DCSC WERE OPENED. SINGER MACHINE COMPANY (IN SINGER) WAS LOWEST WITH A UNIT PRICE OF $76.50. BOTH THE ALLIED AND LEVINE BIDS WERE PREDICATED ON FURNISHING A VALVE MANUFACTURED BY LAWLER AUTOMATIC CONTROLS. WHILE THE BIDS WERE UNDER CONSIDERATION FOR AWARD. WAS THE ONLY ITEM WHICH WAS ACCEPTABLE FOR FSN 4510-273 3365. STATING THAT THE ITEM WAS AVAILABLE FROM ONLY ONE SOURCE. THEREFORE THE USE OF FORMAL ADVERTISING WAS IMPRACTICABLE. THE D AND F WAS APPROVED BY THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION. DSA-700-66 NEG-7438 WAS ISSUED TO POWERS FOR THE TOTAL PROCUREMENT REQUIREMENT OF 415 VALVES.

B-160119, JAN. 27, 1967

TO WACHTEL, WIENER AND SCHLEZINGER:

REFERENCE IS MADE TO YOUR PROTEST BY TELEGRAM DATED SEPTEMBER 22, 1966, AND SUPPLEMENTARY LETTERS, ON BEHALF OF LEONARD VALVE COMPANY (LEONARD), AGAINST THE AWARD BY THE DEFENSE SUPPLY AGENCY (DSA) OF A NEGOTIATED CONTRACT TO POWERS REGULATOR COMPANY (POWERS) FOR THE FURNISHING OF WATER MIXING VALVES IDENTIFIED BY FEDERAL STOCK NUMBER (FSN) 4510-273-3365.

THE PROCUREMENT IN QUESTIONING ORIGINALLY COVERED A REQUIREMENT FOR 165 OF SUCH VALVES FOR THE UNITED STATES NAVAL SHIPS PARTS CONTROL CENTER (SPCC), MECHANICSBURG, PENNSYLVANIA. ACCORDINGLY, THE PROCURING ACTIVITY, THE DEFENSE CONSTRUCTION SUPPLY CENTER (DCSC), DSA, COLUMBUS, OHIO, ISSUED INVITATION FOR BIDS (IFB) NO. DSA-700-66-3837, DATED MARCH 21, 1966, WHICH INCLUDED THE FOLLOWING PURCHASE DESCRIPTION:

"REQN. SC0700-3037-7101

FSN 4510-273-3365

VALVE, WATER MIXING, HAND OPERATED . . . EXPOSED INSTALLATION, BRONZE BODY AND CASE CHROMIUM PLATED FINISH, SUPPLY AND OUTLET CONNECTIONS, 1/2 IN. 14 NPT FEMALE THD, W/AUTOMATIC TEMP CONTROL, 8 MIN TO 9 1/2 MAX GPM, 60 MIN TO 100 MAX PSI RATING PRESSURE, W/DIAL PLATE FOR PANEL MTG, AND 180 TO 210 DEG F TEMP RANGE"

ON APRIL 6, 1966, THE FOUR BIDS RECEIVED BY THE DCSC WERE OPENED. SINGER MACHINE COMPANY (IN SINGER) WAS LOWEST WITH A UNIT PRICE OF $76.50, FOLLOWED BY ALLIED PLUMBING SALES COMPANY (ALLIED) WITH A UNIT PRICE OF $81.09 AND A DISCOUNT OF 2 PERCENT 20 DAYS, BY SAMUEL LEVINE PLUMBING AND HEATING SUPPLIES, INC. (LEVINE) WITH A UNIT PRICE OF $81.60 AND A DISCOUNT OF 2 PERCENT 30 DAYS, AND BY POWERS WITH A UNIT PRICE OF $82.00. BOTH THE ALLIED AND LEVINE BIDS WERE PREDICATED ON FURNISHING A VALVE MANUFACTURED BY LAWLER AUTOMATIC CONTROLS, INC.

WHILE THE BIDS WERE UNDER CONSIDERATION FOR AWARD, DCSC RECEIVED A SECOND REQUISITION FOR THE PURCHASE OF 250 ADDITIONAL UNITS OF THE SAME VALVE TOGETHER WITH ADVICE FROM THE SPCC, THE ENGINEER SUPPORT ACTIVITY FOR THE VALVE, THAT POWERS' PART NO. 435-0260, STYLE D WITH STYLE B DIAL, WAS THE ONLY ITEM WHICH WAS ACCEPTABLE FOR FSN 4510-273 3365. ACCORDINGLY, ON JUNE 1, 1966, THE CONTRACTING OFFICER ISSUED A DETERMINATION AND FINDINGS (D AND F) TO JUSTIFY NEGOTIATION OF THE PROCUREMENT OF 415 VALVES, CITING 10 U.S.C. 2304 (A) (10), RELATING TO IMPRACTICABILITY OF OBTAINING COMPETITION, AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-210.2 (1), RELATING TO SUPPLIES OR SERVICES AVAILABLE FROM ONLY ONE SOURCE, AND STATING THAT THE ITEM WAS AVAILABLE FROM ONLY ONE SOURCE, AND THEREFORE THE USE OF FORMAL ADVERTISING WAS IMPRACTICABLE. ON JUNE 2, THE D AND F WAS APPROVED BY THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION, AND ON JUNE 13, THE IFB HAVING BEEN CANCELLED, REQUEST FOR PROPOSALS (RFP) NO. DSA-700-66 NEG-7438 WAS ISSUED TO POWERS FOR THE TOTAL PROCUREMENT REQUIREMENT OF 415 VALVES. ON JULY 8, CONTRACT NO. DSA-700-67-C-0080 WAS AWARDED TO POWERS FOR THE 415 VALVES AT A UNIT PRICE OF $74.85.

YOU STATE THAT LEONARD HAS PREVIOUSLY SUPPLIED TO BOTH THE SPCC AND THE DCSC A VALVE WHICH IS EQUAL TO THE POWERS VALVE. THEREFORE, YOU PROTEST THE FAILURE OF THE DCSC TO ADVISE LEONARD OF THE IFB OR TO ISSUE TO LEONARD AN RFP. FURTHER, YOU ASSERT THAT THE REQUIREMENT IN ASPR 3-305 THAT D AND F'S SET OUT SUFFICIENT FACTS AND CIRCUMSTANCES TO CLEARLY JUSTIFY NEGOTIATION WAS NOT MET, THE BASIS FOR SUCH CHARGE BEING THAT HAD THE D AND F BEEN OF A THOROUGH NATURE, THE EXISTENCE OF LEONARD AS ANOTHER SOURCE FOR THE VALVE WOULD HAVE BEEN DISCLOSED AND WOULD HAVE NEGATED THE NEGOTIATION ON A "SOLE SOURCE" BASIS. ACCORDINGLY, YOU CONTEND, NO AUTHORITY EXISTED FOR NEGOTIATION, AND THE PROCUREMENT IS ILLEGAL. THIS CONNECTION, YOU CITE 34 COMP. GEN. 551, INVOLVING THE LEASE OF MOTOR VEHICLES BY THE GOVERNMENT, IN WHICH WE HELD THAT SOLE SOURCE AWARD TO ONE OF FOUR CONCERNS WHICH FURNISH THE SAME SERVICE CONTRAVENED THE REQUIREMENTS OF THE ADVERTISING STATUTE, AS PRECEDENT FOR VOIDING THE CONTRACT AWARDED TO POWERS.

POINTING TO THE FACT THAT THE UNIT PRICE OF $74.85 AT WHICH AWARD WAS MADE TO POWERS EXCEEDS BY $10.60 THE UNIT PRICE OF $64.25 AT WHICH A 1963 CONTRACT WAS AWARDED TO LEONARD BY THE DCSC, YOU ASSERT THAT NO CONSIDERATION WAS GIVEN TO PRICE FACTORS IN THE INSTANT CASE, RESULTING IN PREJUDICE TO BOTH LEONARD AND THE GOVERNMENT. SUCH ACTION, YOU STATE, DEPRIVED THE GOVERNMENT OF THE BENEFITS OF OPEN, FULL AND FREE COMPETITION AND HAS UNDERMINED THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM.

IN ADDITION, YOU CONTEND THAT DUE SOLELY TO THE ASSIGNMENT OF DIFFERENT FEDERAL STOCK NUMBERS TO THE POWERS AND LEONARD VALVES, DSA CONCLUDED THAT ONLY ONE SUPPLIER OF THE VALVE IN QUESTION EXISTED. SUCH POSITION, YOU STATE, IS COMPLETELY CONTRARY TO THE DSA (DCSC) POSITION IN A PRIOR PROCUREMENT WHICH WAS THE SUBJECT OF A PROTEST TO OUR OFFICE BY LEONARD, IDENTIFIED BY OUR NUMBER B-159246, THAT REFERENCE TO A FEDERAL STOCK NUMBER IS MERELY INFORMATION SHOWING THE LAST SUPPLIER OF THE VALVE AND IS NOT INTENDED TO BE A PURCHASE DESCRIPTION.

FINALLY, YOU CONTEND THAT IN THE LIGHT OF THE PROCUREMENT HISTORY OF THE VALVE IN QUESTION, WHICH, YOU ALLEGED, SHOWS THAT LEONARD HAS SUCCESSFULLY PERFORMED AND COMPLETED CONTRACTS WITH BOTH SPCC AND DCSC FOR THE ITEM, THE PROCUREMENT SHOULD HAVE BEEN CONDUCTED ON A COMPETITIVE BASIS AS A BRAND NAME OR EQUAL PURCHASE, AND YOU CITE THE PROVISION IN ASPR 1-1206.5 STATING THAT THE POLICIES AND PROCEDURES APPLICABLE TO BRAND NAME OR EQUAL PROCUREMENTS UNDER ASPR 1-1206.2 THROUGH ASPR 1-1206.4 SHALL BE GENERALLY APPLICABLE TO NEGOTIATED CONTRACTS. ACCORDINGLY, YOU REQUEST THAT CANCELLATION OF THE CONTRACT BE DIRECTED AND THAT THE PROCUREMENT BE RESOLICITED BY ADVERTISING.

IN A REPORT FORWARDED TO OUR OFFICE BY DSA ON NOVEMBER 14, 1966, A COPY OF WHICH WAS FURNISHED TO YOU FOR COMMENT, THE CONTRACTING OFFICER STATED, WITH RESPECT TO THE DISTRIBUTION OF THE IFB AND THE RFP, THAT LEONARD WAS NOT INVITED TO BID UNDER THE IFB BECAUSE IT DID NOT APPLY FOR INCLUSION ON ANY OF THE BIDDERS' LISTS AT THE DCSC UNTIL OCTOBER 6, 1966 (MORE THAN SIX MONTHS AFTER THE IFB WAS ISSUED), AND THAT SOLICITATION OF A COMPETITIVE PROPOSAL UNDER THE RFP WOULD HAVE BEEN INCONSISTENT WITH THE SOLE SOURCE DETERMINATION. FURTHER, IT IS STATED THAT IN ACCORDANCE WITH ASPR 1- 1003.1 THE IFB WAS SYNOPSIZED (IN THE COMMERCE BUSINESS DAILY), BUT IN ACCORDANCE WITH ASPR 1-1003.1 (C) (IV) THE RFP WAS EXEMPT FROM THE SYNOPSIS REQUIREMENT. IN THE LIGHT OF SUCH STATEMENTS, NO COMMENT BY OUR OFFICE ON SUCH ISSUE APPEARS NECESSARY.

CONCERNING THE DETERMINATION THAT POWERS WAS SOLE SOURCE FOR THE VALVE IN QUESTION, THE CONTRACTING OFFICER STATED THAT THE POWERS VALVE IS USED IN BOTH DISHWASHERS AND PANTRY SINKS; THAT IN PRIOR PROCUREMENTS THE LEONARD VALVE WAS CONSIDERED TO BE EQUAL TO THE POWERS VALVE FOR THE USE FOR WHICH THE LEONARD VALVE WAS PURCHASED, NAMELY FOR USE IN DISHWASHERS; THAT THE LEONARD VALVE WAS FOUND NOT TO BE A SATISFACTORY SUBSTITUTE FOR THE POWERS VALVE IN PANTRY SINKS BECAUSE IT WOULD NOT SHUT OFF STEAM AND WATER SIMULTANEOUSLY AND PERMITTED RAW STEAM TO DISCHARGE INTO THE SINK IN LIEU OF MIXING STEAM AND WATER IN THE HOT POSITION; AND, THEREFORE, THE SOLE SOURCE DETERMINATION WAS BASED ON THE DIFFERENCE IN PERFORMANCE CHARACTERISTICS OF THE VALVES AND NOT ON THE DIFFERENCE IN FEDERAL STOCK NUMBERS.

WITH RESPECT TO THE 1963 CONTRACT WHICH WAS AWARDED TO LEONARD BY THE DCSC FOR A VALVE DESCRIBED AS LEONARD PART NO. SW 60 OR EQUAL, THE CONTRACTING OFFICER POINTS OUT THAT SUCH AWARD DOES NOT ESTABLISH THAT THE LEONARD PART NO. SW 60 IS EQUAL TO THE POWERS PART NO. 435-0260 COVERED BY THE 1966 RFP. FURTHER, IT IS STATED THAT TECHNICAL DATA AVAILABLE AT THE TIME OF THE 1966 PROCUREMENT WERE NOT SUFFICIENT TO PERMIT THE EVALUATION OF AN "OR EQUAL" BID OR PROPOSAL ON THE POWERS PART NO. 435-0260; HOWEVER, BOTH THE SPCC AND THE DCSC ARE CONTINUING EFFORTS TO DEVELOP A COMPETITIVE PURCHASE DESCRIPTION BASED ON A PERFORMANCE SPECIFICATION FOR THE VALVE IDENTIFIED BY FSN 4510-273 3365.

IN YOUR COMMENTS ON THE CONTRACTING OFFICER'S REPORT, YOU TAKE EXCEPTION TO THE POSITION OF DSA THAT THE LEONARD VALVE IS NOT ADEQUATE FOR USE IN PANTRY SINKS. YOU STATE THAT WHEN THE LEONARD VALVE IS FURNISHED FOR PROCUREMENTS SUCH AS THE 1966 PROCUREMENT IT IS NORMALLY EQUIPPED WITH HAND-OPERATED VOLUME CONTROL AND SHUTOFF, WHICH MAKES IT SUITABLE FOR PANTRY SINK USE; THAT SUCH EQUIPMENT IS OMITTED WHEN ONLY DISHWASHER USE IS INDICATED; AND THAT SUCH INFORMATION COULD HAVE BEEN UNCOVERED BY ELEMENTARY RESEARCH. IN ADDITION, YOU ADHERE TO YOUR VIEW THAT THE POSITION OF DSA ON THE SIGNIFICANCE OF FEDERAL STOCK NUMBERS IN THE PROCUREMENT IN QUESTION IS INCONSISTENT WITH THE POSITION TAKEN BY DSA IN ANOTHER VALVE PROCUREMENT IN WHICH LEONARD FILED A PROTEST WITH OUR OFFICE, IDENTIFIED BY OUR NUMBER B-159246.

THE RECORD SHOWS THAT THE SPCC CONTRACT AWARDED TO LEONARD ON DECEMBER 23, 1960, NO. N104-77991, WAS BASED ON AN INVITATION FOR BIDS (NO. 104-443 -61) WHICH CITED FSN 4510-273-3365 WITH THE STATEMENT THAT SUCH NUMBER WAS FOR REFERENCE ONLY AND THAT AN APPLICABLE FSN WOULD BE ASSIGNED TO THE CONTRACTOR BEFORE SHIPMENT, AND WHICH SPECIFIED THAT THE VALVE TO BE FURNISHED SHOULD BE POWERS STYLE D MIXER WITH STYLE B DIAL FOR PANEL MOUNTING, OR EQUAL, FOR DISHWASHER APPLICATION. FURTHER, MODIFICATION NO. 1, ISSUED JANUARY 26, 1961, TO THE CONTRACT SO AWARDED TO LEONARD ASSIGNED FSN HF4510-833-5555 TO THE LEONARD VALVE. IN ADDITION, THE RECORD SHOWS THAT NOTWITHSTANDING THE LEONARD VALVE HAD BEEN PROCURED BY THE SPCC FOR DISHWASHER USE ONLY, IT WAS INSTALLED IN 1961 IN SEVERAL NAVAL VESSELS IN PLACE OF THE FSN 4510 273-3365 VALVE FOR WARDROOM AND CHIEF PETTY OFFICER PANTRY USE, BUT WAS FOUND TO BE UNSATISFACTORY FOR SEVERAL REASONS, INCLUDING THE NEED FOR AN ADDITIONAL STOP VALVE IN THE HOT FRESH WATER LINE, MAINTENANCE PROBLEMS, LEAKING, FAILURE TO SHUT OFF BOTH STEAM AND WATER SIMULTANEOUSLY, FAILURE TO MIX STEAM WITH WATER WHEN IN HOT POSITION, AND DISCHARGE OF RAW STEAM INTO SINK. ACCORDINGLY, USE OF THE FSN F4510-833-5555 (LEONARD) VALVE AS AN EQUIVALENT OF THE FSN 4510-273 3365 VALVE WAS DISCONTINUED ON JUNE 15, 1961.

AN EXAMINATION OF OUR FILE B-159246 ON LEONARD'S PROTEST IN THE OTHER VALVE PROCUREMENT TO WHICH YOU REFER SHOWS THAT THE IFB PURCHASE DESCRIPTION CITED A FEDERAL STOCK NUMBER AND A MILITARY SPECIFICATION. THE SAME MILITARY SPECIFICATION WAS CITED ON THE PAGE IN THE FEDERAL STOCK CATALOG SETTING FORTH THE CATALOG DESCRIPTION OF THE ITEM, WHICH ALSO LISTED NUMBERS WHICH WERE IDENTIFIABLE AS LEONARD'S CODE AND PART NUMBERS FOR THE SAME TYPE VALVE. ACCORDINGLY, IT WAS LEONARD'S POSITION THAT THE CITATION OF ITS IDENTIFYING NUMBERS INDICATED THAT LEONARD WAS THE SOLE SOURCE FOR THE VALVE. IT WAS THE POSITION OF DSA, HOWEVER, THAT THE PART AND CODE NUMBERS WERE MERELY INFORMATION SHOWING THE LAST SUPPLIER OF THE VALVE AND THAT SINCE THE SAME MILITARY SPECIFICATION WAS CITED IN THE CATALOG DESCRIPTION AND THE IFB PURCHASE DESCRIPTION, BIDDERS WERE NOT REQUIRED TO SUPPLY A VALVE IDENTICAL TO THE LEONARD VALVE BUT ONLY A VALVE COMPLYING WITH THE MILITARY SPECIFICATION. IN OUR DECISION B-159246, NOVEMBER 25, 1966, WE CONCURRED WITH DSA'S POSITION ON SUCH ISSUE AND STATED THAT SUCH POSITION WAS IN ACCORD WITH THE PRINCIPLE THAT ADVERTISED SPECIFICATIONS SHOULD BE STATED IN TERMS PERMITTING THE BROADEST FIELD OF COMPETITION WITHIN THE MINIMUM NEEDS REQUIRED, NOT THE MAXIMUM DESIRED.

CONCERNING THE ASSIGNMENT OF A SEPARATE FSN TO THE VALVE SUPPLIED BY LEONARD TO SPCC UNDER THE 1960 CONTRACT, SPCC JUSTIFIES SUCH ACTION ON THE BASIS THAT THE LEONARD VALVE PERFORMS ONLY ONE OF THE FUNCTIONS REQUIRED OF THE FSN 4510-273-3365 VALVE, THAT IS, DISHWASHER APPLICATION, AND, THEREFORE, A SEPARATE NUMBER IS REQUIRED UNDER THE PRINCIPLES OF ITEM IDENTIFICATION SET OUT IN SUBSECTION 211.03, FEDERAL MANUAL FOR SUPPLY CATALOGING, WHICH READS AS FOLLOWS:

"211.03 ITEM OF SUPPLY

"A. EXPLANATION.

"/1) AN ITEM OF SUPPLY CONSISTS OF ANY NUMBER OF PIECES OR OBJECTS, WHICH ARE WITHIN THE LIMITS OR TOLERANCES DICTATED BY THE LOGISTICS RESPONSIBILITIES OF ANY ONE SUPPLY, INDUSTRIAL, OR OTHER MANAGEMENT SYSTEM FOR ITEMS OF PERSONAL PROPERTY, TREATED IN THE OPERATIONS OF THAT SYSTEM AS BEING IDENTICAL.

"/2) AN ITEM OF SUPPLY MAY BE---

"/A) A SINGLE ITEM OF PRODUCTION.

"/B) TWO OR MORE ITEMS OF PRODUCTION THAT ARE FUNCTIONALLY INTERCHANGEABLE OR THAT MAY BE SUBSTITUTED FOR THE SAME PURPOSE AND THAT ARE COMPARABLE IN TERMS OF USE.

"/C) MORE METICULOUS (A SELECTION OF CLOSER TOLERANCE, SPECIFIC CHARACTERISTICS, FINER QUALITY) THAN THE NORMAL ITEM OF PRODUCTION.

"/D) A MODIFICATION (ALTERED BY THE USER OR BY REQUEST OF THE USER) OF A NORMAL ITEM OF PRODUCTION. "NOTE.--- AN ITEM OF PRODUCTION CONSISTS OF THOSE PIECES OR OBJECTS GROUPED WITHIN A MANUFACTURER'S IDENTIFYING NUMBER AND CONFORMING TO THE SAME ENGINEERING DRAWINGS, SPECIFICATIONS, AND INSPECTION.

"B. DETERMINATION.

"/1) EACH GOVERNMENT ACTIVITY SHALL DETERMINE, AND BE ABLE TO JUSTIFY, ITS ITEMS OF SUPPLY IN TERMS OF TECHNICAL CONSIDERATIONS AND ITS LOGISTICS RESPONSIBILITY. IN ACCORDANCE WITH THIS PRINCIPLE, AN ACTIVITY SHALL DEFINE ITS ITEMS OF SUPPLY IN THE BROADEST POSSIBLE TERMS THAT WILL ASSURE IDENTIFICATION CONSISTENT WITH THE REQUIREMENTS OF ITS LOGISTICS RESPONSIBILITIES. "/2) BECAUSE OF THE ITEM-OF SUPPLY PRINCIPLE, ITEM-OF- SUPPLY CONCEPTS COVERING CLOSELY RELATED ITEMS MAY EXIST AT DIFFERENT LEVELS OF DETAIL OR TOLERANCE, ACCORDING TO THE NUMBER AND NATURE OF THE CHARACTERISTICS INCLUDED IN THE CONCEPTS. IN THIS SITUATION THE BROADER ITEM OF SUPPLY MAY OVERLAP THE NARROWER ITEM OF SUPPLY IN TERMS OF THE RANGE OF THE PIECES OR OBJECTS COVERED BY EACH. EACH SUCH DIFFERENT ITEM OF SUPPLY, THE BROADER AND THE NARROWER, IS ASSIGNED TO A SEPARATE FEDERAL STOCK NUMBER IN THE FEDERAL CATALOG SYSTEM.

"C. BASIS FOR IDENTIFICATION.

"/1) THE IDENTIFICATION AND DIFFERENTIATION OF AN ITEM OF SUPPLY RESTS ON THE CHARACTERISTICS INHERENT IN THE CONCEPT OF THE ITEM. THE PARTICULAR CHARACTERISTICS APPROPRIATE TO A PARTICULAR CONCEPT CAN BE DISCLOSED ONLY BY TECHNICAL RESEARCH, WHICH THEREFORE SERVES AS THE FOUNDATION FOR THE PROCESS OF ITEM IDENTIFICATION.

"/2) THE CHARACTERISTICS OF AN ITEM OF SUPPLY ARE BASICALLY OF TWO KINDS:

"/A) PHYSICAL CHARACTERISTICS, CONSISTING OF EVERYTHING THAT ENTERS INTO THE MAKEUP OF THE ITEM, SUCH AS ITS STRUCTURE, ITS MATERIAL CONTENT, ITS CHEMICAL COMPOSITION, ELECTRICAL DATA, DIMENSIONS, THE FORMATION OR ARRANGEMENT OF ITS PARTS, THE PRINCIPLES OF OPERATION, AND THE LIKE.

"/B) PERFORMANCE CHARACTERISTICS, CONSISTING OF THE SPECIAL OR PECULIAR KIND OF ACTION OR SERVICE PROVIDED BY, AND EXPECTED OF, THE ITEM BY VIRTUE OF ITS PHYSICAL CHARACTERISTICS.'

UNDER 10 U.S.C. 2304 (A) (10), NEGOTIATION IN LIEU OF FORMAL ADVERTISING MAY BE EMPLOYED WHEN THE PURCHASE OR CONTRACT IS FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION. ASPR 3-210.2 (I), ISSUED IN IMPLEMENTATION OF THE STATUTORY PROVISION, AUTHORIZES USE OF NEGOTIATION WHEN SUPPLIES OR SERVICES CAN BE OBTAINED FROM ONLY ONE PERSON OR FIRM ("SOLE SOURCE OF SUPPLY"). UNDER 10 U.S.C. 2310 (B), THE DECISION TO NEGOTIATE PURSUANT TO 10 U.S.C. 2304 (A) (10) IS REQUIRED TO BE BASED ON A WRITTEN FINDING SETTING FORTH FACTS AND CIRCUMSTANCES CLEARLY AND CONVINCINGLY ESTABLISHING THAT FORMAL ADVERTISING WOULD NOT HAVE BEEN FEASIBLE AND PRACTICABLE, AND SUCH FINDING IS FINAL. OUR OFFICE MAY NOT QUESTION SUCH DETERMINATION AND FINDINGS UNLESS THEY ARE PROVEN ARBITRARY, UNREASONABLE, OR NOT SUPPORTED BY THE FACTS AND CIRCUMSTANCES INVOLVED.

THE REPORTED FACTS ESTABLISH THAT THE 1966 PROCUREMENT NEED WAS FOR A VALVE USABLE IN BOTH DISHWASHING MACHINES AND PANTRY SINKS, WHICH VALVE IS DESIGNATED IN THE FEDERAL CATALOGING MANUAL AS FSN 4510-273 3365, AND THAT THE ONLY VALVE KNOWN TO DSA AND TO SPCC WHICH MET SUCH REQUIREMENTS WAS THE POWERS VALVE IDENTIFIED BY PART NO. 435-0260, STYLE D WITH STYLE B DIAL. THERE IS NO INDICATION THAT EITHER DSA OR SPCC, WHICH HAS HAD MORE THAN 12 YEARS' EXPERIENCE WITH THE VALVE IN QUESTION, WAS AWARE THAT THE VALVE PREVIOUSLY SUPPLIED BY LEONARD TO SPCC AND DCSC COULD BE MADE SUITABLE FOR PANTRY SINK USE, AS YOU CLAIM, WITH THE ADDITION OF HAND- OPERATED VOLUME CONTROL AND SHUTOFF. IT IS OUR VIEW, THEREFORE, THAT THE FACTS AS KNOWN TO SPCC AND DSA WERE SUFFICIENT TO SUPPORT THE D AND F ISSUED BY THE CONTRACTING OFFICER, AND APPROVED BY HIGHER AUTHORITY, TO NEGOTIATE SOLE SOURCE WITH POWERS FOR THE VALVE. ACCORDINGLY, WHILE WE CONCUR WITH YOUR CONTENTION THAT IN THE D AND F THE BASIS FOR THE USE OF NEGOTIATION SHOULD HAVE BEEN SET FORTH SPECIFICALLY, PURSUANT TO ASPR 3- 305 (B), WE FIND NO SUFFICIENT LEGAL BASIS TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED TO POWERS BY USE OF THE SOLE SOURCE NEGOTIATION AUTHORITY.

CONCERNING THE FACT THAT DIFFERENT FSN'S WERE ASSIGNED TO THE VALVES PREVIOUSLY SUPPLIED BY POWERS AND BY LEONARD, THE RECORD SHOWS THAT SUCH ACTION WAS BASED ON THE PERFORMANCE CHARACTERISTICS OF EACH VALVE IN COMPLIANCE WITH THE PROVISIONS QUOTED ABOVE FROM THE CATALOGING MANUAL. ACCORDINGLY, AND SINCE DSA HAS STATED THAT VALVES OF MANUFACTURERS OTHER THAN POWERS WILL ALSO BE STOCKED UNDER FSN 4510 273-3365 IF FOUND TO MEET ITS REQUIREMENTS, THE RECORD DOES NOT SUPPORT YOUR CONTENTION THAT DSA HAS TAKEN THE POSITION THAT AN FSN DENOTES A SOLE SOURCE FOR AN ITEM. NEITHER DO WE CONSIDER THAT DSA'S POSITION IN THIS CASE IS INCONSISTENT WITH ITS POSITION IN B-159246 THAT THE LISTING OF IDENTIFYING NUMBERS OF THE PREVIOUS SUPPLIER (LEONARD) OF A VALVE WAS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE INTERPRETED AS INDICATING THAT SUCH SUPPLIER WAS THE SOLE SOURCE FOR THE ITEM.

WITH RESPECT TO YOUR CONTENTION THAT THE PROCUREMENT SHOULD HAVE BEEN ON A BRAND NAME OR EQUAL BASIS, IF IT CAN CORRECTLY BE ASSUMED THAT "OR EQUAL" ITEMS WERE IN FACT AVAILABLE, IT WOULD APPEAR THAT THE SOLICITATION OF BIDS OR OFFERS ON THAT BASIS WOULD HAVE BEEN PROPER. HOWEVER, WE SEE NO BASIS FOR REQUIRING SOLICITATION ON AN "OR EQUAL" BASIS WHERE ALL EVIDENCE OF RECORD INDICATES THERE IS ONLY ONE SOURCE, AND IN THE LIGHT OF THE FACTS EVIDENCING THAT THERE WAS NO KNOWN EQUAL OF THE POWERS VALVE, WE ARE UNABLE TO CONCLUDE THAT DSA WAS REQUIRED TO USE SUCH PROCEDURE IN THE PROCUREMENT IN QUESTION.

IN THIS CONNECTION, WE ARE ADVISED THAT ACTION IS BEING TAKEN BY DSA (DCSC) AND SPCC TO DRAFT PERFORMANCE TYPE SPECIFICATIONS FOR THE ITEM IN QUESTION, AND WE THEREFORE ASSUME THAT FUTURE PROCUREMENTS OF THE ITEM WILL BE ON A COMPETITIVE BASIS.

CONCERNING THE MATTER OF PRICE, THE NEGOTIATION AUTHORITY EMPLOYED BY DSA, WHICH WE HAVE CONCLUDED WAS PROPERLY USED, SPECIFICALLY AUTHORIZES PROCUREMENT WITHOUT COMPETITION. FURTHER, ABSENT ANY EVIDENCE THAT THERE WAS NO PRICE OR COST ANALYSIS BY DSA AS REQUIRED BY ASPR 3-807.2 (A), WE ARE UNABLE TO CONCUR WITH YOUR CONTENTION THAT PRICE WAS NOT CONSIDERED AT ALL IN EFFECTING THE PROCUREMENT.

IN THE LIGHT OF THE ADMINISTRATIVE EXPLANATION OF THE CIRCUMSTANCES SURROUNDING THE CONDUCT OF THE PROCUREMENT, WE FIND NO ADEQUATE LEGAL BASIS ON WHICH TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED TO POWERS. ACCORDINGLY, YOUR REQUEST THAT OUR OFFICE DIRECT CANCELLATION OF THE CONTRACT AND ADVERTISE FOR BIDS ON THE PROCUREMENT IS DENIED.