B-161199, JUN. 30, 1967

B-161199: Jun 30, 1967

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO DAYTON ELECTRONIC PRODUCTS COMPANY: REFERENCE IS MADE TO YOUR PROTEST. WHICH WAS CANCELLED SUBSEQUENT TO BID OPENING. UNDER WHICH AWARD IS BEING WITHHELD PENDING DECISION BY OUR OFFICE ON YOUR PROTEST. PRODUCTION DELIVERIES UNDER BID A AND BID C WERE REQUIRED TO COMMENCE IN MARCH 1968 AND TO BE COMPLETED IN AUGUST 1969. NEW PRODUCERS WERE REQUIRED TO BID ONLY UNDER BID B. BIDS WERE OPENED AS SCHEDULED. 546 UNDER BID B WAS LOWEST. A QUESTION AROSE REGARDING ITS RESPONSIVENESS DUE TO A STATEMENT INCLUDED IN YOUR BID COVER LETTER TO THE EFFECT THAT THE AVAILABILITY OF GOVERNMENT TOOLING WAS ANTICIPATED BY YOU AND WOULD BE UTILIZED FOR THE PERFORMANCE OF THE CONTRACT. YOU INDICATED THAT YOU HAD BEEN INFORMALLY ADVISED BY A GOVERNMENT REPRESENTATIVE THAT YOUR BID WAS NONRESPONSIVE BUT YOU WOULD BE ACCORDED AN OPPORTUNITY TO SUBMIT A REBUTTAL.

B-161199, JUN. 30, 1967

TO DAYTON ELECTRONIC PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR PROTEST, BY TELEGRAM DATED APRIL 4, 1967, AS SUPPLEMENTED BY SUBSEQUENT CORRESPONDENCE, CONCERNING A PROCUREMENT BY THE DEPARTMENT OF THE NAVY OF ULTRA HIGH FREQUENCY RADIO EQUIPMENT, WHICH HAS BEEN THE SUBJECT OF TWO SOLICITATIONS, INVITATION FOR BIDS (IFB) NO. N00600-67-B-0402-S, ISSUED JANUARY 27, 1967, BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C., WHICH WAS CANCELLED SUBSEQUENT TO BID OPENING, AND SOLICITATION FOR OFFERS NO. N00024-67-R 3599 (A), ISSUED MAY 5, 1967, BY THE NAVAL SHIP SYSTEMS COMMAND (NSSC), UNDER WHICH AWARD IS BEING WITHHELD PENDING DECISION BY OUR OFFICE ON YOUR PROTEST. THE EQUIPMENT IN QUESTION INCLUDES THE AN/SRC 20 TRANSCEIVER, WHICH HAS BEEN PREVIOUSLY PRODUCED BY ONLY THREE FIRMS, COLLINS RADIO COMPANY (COLLINS), STEWART-WARNER CORPORATION (STEWART-WARNER), AND TELEDYNE SYSTEMS CORPORATION (TELEDYNE), AND THE AN/URC-9Y RADIO SET, DC VOLTAGE, WHICH HAS BEEN PREVIOUSLY PRODUCED BY STEWART-WARNER AND TELEDYNE ONLY.

THE IFB NAMED THE PRIOR PRODUCERS OF THE AN/SRC-20 AND THE AN/URC 9Y AND REQUIRED THAT SUCH FIRMS BID ONLY UNDER BID A, PROVIDING FOR WAIVER OF FIRST ARTICLE TESTING ON BOTH SUCH ITEMS, OR UNDER BID C, PROVIDING FOR WAIVER OF FIRST ARTICLE TESTING ON ONLY THE AN/SRC-20. PRODUCTION DELIVERIES UNDER BID A AND BID C WERE REQUIRED TO COMMENCE IN MARCH 1968 AND TO BE COMPLETED IN AUGUST 1969. NEW PRODUCERS WERE REQUIRED TO BID ONLY UNDER BID B, WHICH REQUIRED FIRST ARTICLE TESTING ON BOTH THE AN/SRC- 20 AND THE AN/URC-9Y AND CALLED FOR PRODUCTION DELIVERIES TO COMMENCE IN JULY 1969 AND TO BE COMPLETED IN NOVEMBER 1970.

ON MARCH 16, 1967, BIDS WERE OPENED AS SCHEDULED. YOUR BID OF $10,515,546 UNDER BID B WAS LOWEST, BUT A QUESTION AROSE REGARDING ITS RESPONSIVENESS DUE TO A STATEMENT INCLUDED IN YOUR BID COVER LETTER TO THE EFFECT THAT THE AVAILABILITY OF GOVERNMENT TOOLING WAS ANTICIPATED BY YOU AND WOULD BE UTILIZED FOR THE PERFORMANCE OF THE CONTRACT. IN YOUR TELEGRAM OF APRIL 4 TO OUR OFFICE, YOU INDICATED THAT YOU HAD BEEN INFORMALLY ADVISED BY A GOVERNMENT REPRESENTATIVE THAT YOUR BID WAS NONRESPONSIVE BUT YOU WOULD BE ACCORDED AN OPPORTUNITY TO SUBMIT A REBUTTAL, AND YOU PROTESTED AGAINST THE REJECTION OF YOUR BID AND AWARD TO ANY OTHER BIDDER PENDING DECISION BY OUR OFFICE ON THE MATTER.

BY LETTER DATED APRIL 11, YOU FURNISHED TO OUR OFFICE A COPY OF A LETTER DATED APRIL 10 WHICH YOU HAD ADDRESSED TO THE PROCURING ACTIVITY AND IN WHICH YOU HAD EXPLAINED THAT THE DISPUTED STATEMENT IN YOUR BID COVER LETTER WAS INTENDED MERELY TO INDICATE THAT YOU WERE AWARE THAT GOVERNMENT TOOLING MIGHT BE AVAILABLE AND WOULD BE WILLING TO NEGOTIATE A LOWER PRICE WITH THE GOVERNMENT IF PERMITTED TO UTILIZE IT, AND YOU STATED THAT YOU HAD NOT INDICATED IN YOUR BID THAT YOU WOULD NOT BE BOUND WITHOUT GOVERNMENT TOOLING.

SOMETIME SUBSEQUENT TO THE OPENING OF BIDS AND BEFORE RESPONDING TO OUR REQUEST FOR A REPORT CONCERNING THE MATTERS INVOLVED IN THE PROTEST, THE NSSC MADE A REVIEW OF THE PROCUREMENT NEEDS AND DETERMINED THAT THE BID B DELIVERY SCHEDULE IN THE IFB WOULD NOT MEET THE DEPARTMENT'S REQUIREMENTS. ACCORDINGLY, THE IFB WAS CANCELLED, AND YOU WERE NOTIFIED OF SUCH ACTION IN A LETTER DATED MAY 8 FROM THE NSSC, WHICH GAVE AS THE REASON FOR CANCELLATION THE FAILURE OF THE DELIVERY SCHEDULE IN THE IFB TO MEET URGENT MILITARY REQUIREMENTS. THE SOLICITATION FOR OFFERS WAS ISSUED FOR THE SAME EQUIPMENTS, CALLING FOR DELIVERIES TO COMMENCE APRIL 1, 1968, AND BE COMPLETED BY NOVEMBER 1969.

IN A TELEGRAM DATED MAY 15, YOU PROTESTED TO OUR OFFICE AGAINST THE CANCELLATION OF THE IFB AND THE ISSUANCE OF A SECOND SOLICITATION ON A NEGOTIATED BASIS. YOU CONTEND THAT THE USE OF NEGOTIATION ELIMINATES COMPETITION AND AMOUNTS TO A SOLE SOURCE PROCUREMENT; THAT THE GOVERNMENT'S CLAIM OF URGENCY AS A BASIS FOR NEGOTIATION IS NOT WARRANTED IN THE LIGHT OF THE PROCUREMENT HISTORY OF THE EQUIPMENT AND THE LOW PRIORITY RATING ASSIGNED TO THE PROCUREMENT; AND THAT THE NEGOTIATED CONTRACT WILL COST THE TAXPAYERS A MINIMUM OF $2,380,000 AND CONCEIVABLY DOUBLE THAT AMOUNT (REPRESENTING, APPARENTLY, THE DIFFERENCE BETWEEN YOUR BID PRICE AND THE HIGHEST PRICE BID BY A PRIOR PRODUCER ON THE IFB).

ON MAY 17 OUR OFFICE RECEIVED A LETTER DATED MAY 15 FROM THE NSSC READING AS FOLLOWS:

"THIS IS TO ADVISE YOU THAT ON 8 MAY 1967 NAVY PURCHASING OFFICE CANCELED INVITATION FOR BIDS NO. N00600-67-B-0402-S. THIS ACTION WAS DICTATED BY URGENT MILITARY REQUIREMENTS WHICH COULD NOT HAVE BEEN MET UNDER THE DELIVERY SCHEDULE SET FORTH IN THE CANCELED IFB. ON SAME DATE SOLICITATION FOR OFFERS NO. N00024-67-R-3599 WAS ISSUED WITH CLOSING DATE 16 MAY 1967 FOR THE PURPOSE OF MEETING THE REVISED SCHEDULE REQUIREMENTS.

"BECAUSE OF THE ABOVE CIRCUMSTANCES THE PROTEST SUBMITTED BY DAYTON ELECTRONIC PRODUCTS COMPANY (DEPCO) UNDER B-161199 BECAME MOOT. AS A RESULT, NO FURTHER REPORT ON THE PROTEST REFERRED TO IN YOUR LETTERS OF 17 AND 26 APRIL 1967 IS NECESSARY.'

BY LETTER DATED MAY 27, YOU SUPPLEMENTED YOUR PROTEST TO OUR OFFICE WITH A COPY OF A LETTER OF MAY 26 WHICH YOU HAD ADDRESSED TO THE NSSC. IN THE MAY 26 LETTER, YOU REPEATED SEVERAL OF THE CONTENTIONS YOU HAD PREVIOUSLY MADE REGARDING THE CONDUCT OF THE PROCUREMENT; QUESTIONED THE RESPONSIBILITY OF TELEDYNE AND STEWART-WARNER, STATING THAT YOU HAD HEARD RUMORS THAT NEITHER FIRM WAS MEETING DELIVERY REQUIREMENTS UNDER EXISTING CONTRACTS FOR THE EQUIPMENT IN QUESTION; ASSERTED THAT YOU HAD PRODUCED ALMOST IDENTICAL EQUIPMENT FOR THE UNITED STATES ARMY ELECTRONICS COMMAND, A MATTER IN WHICH THE DEPARTMENT OF THE NAVY WAS APPARENTLY NOT INTERESTED; AND QUESTIONED WHETHER, FROM THE STANDPOINT OF COST, DELIVERY AND OTHER FACTORS, THE REQUIREMENTS SET FORTH IN THE NEGOTIATED SOLICITATION ARE REALISTIC.

IN A LETTER DATED JUNE 22, YOU CONTENDED THAT COLLINS CANNOT MEET THE REQUIREMENTS OF THE NEGOTIATED SOLICITATION, THEREBY LEAVING ONLY TELEDYNE AND STEWART-WARNER AS ELIGIBLE PRIOR PRODUCERS. IN THIS CONNECTION, YOU MADE THE FOLLOWING STATEMENTS:

"IT HAS BEEN STATED THAT BOTH OF THE CONTRACTS OUTSTANDING PREVIOUSLY AWARDED TO STEWART-WARNER AND TELEDYNE CONTAIN A LIQUIDATED DAMAGE CLAUSE, WHICH WAS WAIVED SUBSEQUENT TO CONTRACT AWARD. THE REQUEST FOR PROPOSAL PROVIDES FOR LIQUIDATED DAMAGES. IN THE EVENT AN AWARD IS MADE UNDER THE REQUEST FOR PROPOSAL TO EITHER STEWART-WARNER OR TELEDYNE, WHAT ASSURANCE DOES THE PUBLIC HAVE THAT DELIVERY SCHEDULES UNDER THEIR EXTRINSIC CONTRACTS WILL BE MET AND NOT DIVERTED TO THOSE OUTLINED IN THE REQUEST FOR PROPOSAL, AND, FURTHER, WHAT AVENUE IS AVAILABLE TO THE PROCURING AGENCY IN THE EVENT A DELINQUENCY BECOMES EVIDENT UNDER PRESENT CONTRACTS? " WITH FURTHER REFERENCE TO THE ALLEGEDLY UNSATISFACTORY PERFORMANCES OF TELEDYNE AND STEWART WARNER UNDER THEIR EXISTING CONTRACTS, YOU QUESTIONED THEIR ELIGIBILITY FOR AWARD UNDER THE NEGOTIATED SOLICITATION, AND YOU CONTENDED THAT REVIEW OF THEIR PAST PERFORMANCE RECORDS SHOWS THAT THE DELIVERY REQUIREMENTS IN SUCH SOLICITATION ARE UNREALISTIC. IN ADDITION, YOU ASSERTED THAT THERE IS NO INDICATION THAT THE DEPARTMENT OF THE NAVY HAS COMPLIED WITH THE PROCEDURES APPLICABLE TO URGENT PROCUREMENTS WHEREBY THE PROCUREMENT NEED SHOULD BE RELATED TO CURRENT CONTRACT DELIVERIES, ONLY THE ADDITIONAL UNITS NEEDED TO SATISFY THE URGENCY SHOULD BE PROCURED, AND ANY ADDITIONAL REQUIREMENTS PROCURED THROUGH READVERTISEMENT.

IN A LETTER DATED MAY 29, 1967, THE NSSC REPORTED TO OUR OFFICE THAT THE EQUIPMENT IN QUESTION IS REQUIRED FOR NEW CONSTRUCTION AND CONVERSION OF SHIPS, FOR ACTIVE FLEET MODERNIZATION, AND FOR SOUTHEAST ASIA AND FOREIGN GOVERNMENTS, AND THAT A COMMAND REVIEW WAS MADE AFTER BID OPENING TO DETERMINE THE IMPACT UPON MILITARY REQUIREMENTS OF THE BID B DELIVERY SCHEDULE, UNDER WHICH PRODUCTION DELIVERIES WOULD NOT COMMENCE UNTIL JULY 1969. IT IS STATED THAT SUCH REVIEW WAS CONDUCTED ON A SHIP-BY-SHIP BASIS FOR ABOUT 65 UNITED STATES NAVY SHIPS, AND ON AN INDIVIDUAL BASIS FOR THE FOREIGN GOVERNMENTS, THE WHITE SANDS MISSILE RANGE, AND SOUTHEAST ASIA, RESULTING IN DISCLOSURE THAT THE GREAT BULK OF MILITARY REQUIREMENTS COULD NOT BE MET UNDER THE BID B DELIVERY SCHEDULE IN THE IFB FOR THE REASON THAT SUCH SCHEDULE WOULD CAUSE A SERIOUS DELAY IN THE ACTIVE FLEET MODERNIZATION PROGRAM, INCLUDING SHIPS ACTIVE IN, OR DESTINED FOR, THE SOUTHEAST ASIA AREA. IN ADDITION, IT IS STATED, THE DELAY WOULD CAUSE MOST OF THE REQUIRED DATES FOR NEW CONSTRUCTION AND CONVERSION PROGRAMS AND COMMITMENTS TO FOREIGN GOVERNMENTS TO BE MISSED. FOR SUCH REASONS, AND FOR THE ADDITIONAL REASON THAT UNDER THE TERMS OF THE IFB AWARD COULD NOT BE MADE ON ANY BIDDER'S BID A, CANCELLATION OF THE IFB WAS DEEMED NECESSARY.

WITH RESPECT TO THE MATTER OF PUBLICIZING THE NEGOTIATED SOLICITATION, THE NSSC REPORTS THAT THE DECISION NOT TO SYNOPSIZE THE SOLICITATION WAS BASED ON THE FACT THAT THE IFB HAD BEEN PUBLICIZED FOR SUBSTANTIALLY THE SAME REQUIREMENTS AND UNDER THE SAME SPECIFICATIONS AND THAT THE USE OF THE SHORT OPENING OF ABOUT 10 DAYS (I.E., MAY 5 TO 16) WAS BASED ON THE URGENCY OF THE DELIVERY REQUIREMENTS. IN THIS CONNECTION, IT IS STATED THAT WHILE YOU WERE ACCORDED A MEETING WITH NAVY REPRESENTATIVES, AT WHICH YOU REQUESTED AND WERE FURNISHED A COPY OF SUCH SOLICITATION, YOU DID NOT MAKE ANY REQUEST THAT THE CLOSING DATE BE EXTENDED NOR DID YOU SUBMIT ANY OFFER. NO FURTHER INFORMATION REGARDING THE RESULTS OF THE SOLICITATION, SUCH AS THE NUMBER AND IDENTITY OF THE OFFERORS AND THE AMOUNTS QUOTED, MAY BE FURNISHED INASMUCH AS AWARD HAS NOT YET BEEN MADE. SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 3-507.2.

THE DETERMINATION AND FINDINGS (DANDF) ISSUED BY THE CONTRACTING OFFICER IN SUPPORT OF THE NEGOTIATED SOLICITATION CITES THE NEGOTIATION AUTHORITY IN 10 U.S.C. 2304 (A) (10) RELATING TO IMPRACTICABILITY OF OBTAINING COMPETITION, AND STATES THAT IN THE LIGHT OF THE EXISTING DELIVERY REQUIREMENTS ONLY PRIOR PRODUCERS CAN MEET THE NAVY'S IMMEDIATE NEEDS; THAT THE PRICES QUOTED BY SUCH PRODUCERS UNDER THE IFB INDICATE THAT A TRULY COMPETITIVE PRICING SITUATION IS ABSENT; AND THAT FURTHER NEGOTIATIONS REQUIRING SUBMISSION OF COST OR PRICE INFORMATION WILL ASSURE REASONABLENESS OF PRICE. THE SOLICITATION INCLUDES STATEMENTS TO THE EFFECT THAT AWARD MUST BE MADE BY JUNE 30, 1967, TO ASSURE COMPLIANCE WITH THE REQUIREMENT FOR DELIVERIES COMMENCING APRIL 1, 1968; THAT A PRODUCER FOR WHOM THE PREPRODUCTION REQUIREMENTS COULD NOT BE WAIVED WOULD HAVE TO SUBMIT ACCEPTABLE PREPRODUCTION UNITS NO LATER THAN JANUARY 1, 1968, OR ONLY 6 MONTHS AFTER AWARD, IN ORDER TO ALLOW THE GOVERNMENT THE 90-DAY PERIOD REQUIRED FOR EVALUATION OF PREPRODUCTION EQUIPMENT; AND THAT PAST EXPERIENCE HAS SHOWN THAT A NEW SUPPLIER OF THE AN/SRC-20 AND THE AN/URC- 9Y WOULD REQUIRE AT LEAST 16 MONTHS FOR FURNISHING AND TESTING PREPRODUCTION UNITS BEFORE THEIR DELIVERY TO THE GOVERNMENT AND ABOUT 7 MONTHS AFTER PREPRODUCTION APPROVAL BY THE GOVERNMENT BEFORE COMMENCING NEW PRODUCTION DELIVERIES. IN ADDITION, THE SOLICITATION REQUIRES NEW SUPPLIERS TO FURNISH CERTAIN INFORMATION ON MANNING AND WORK BREAKDOWN FOR THE PERIOD OF PERFORMANCE OF THE CONTRACT AND INCLUDES PROVISIONS FOR THE FURNISHING OF COST AND PRICING DATA AND FOR PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA.

WITH REGARD TO THE PERFORMANCES OF TELEDYNE AND STEWART-WARNER, THE NSSC REPORT OF MAY 29 STATED THAT BOTH CONTRACTORS ARE IN PRODUCTION AND ARE DELIVERING UNDER CURRENT CONTRACTS FOR THE PROCUREMENT EQUIPMENT. ADDITION, A LETTER DATED JUNE 27, FROM THE DEPARTMENT OF THE NAVY INCLUDES THE FOLLOWING PERTINENT INFORMATION:

"BASED ON OUR RECORDS OF THE PRODUCTION STATUS OF THE TWO CURRENT PRODUCERS, WHICH SUMMARIZE AND CONSOLIDATE BY CONTRACT NUMBER REPORTS OF SHIPMENTS, VERIFICATION BY GOVERNMENT INSPECTORS AND ON SITE VISITS BY NAVY PERSONNEL, THESE TWO CONTRACTORS ARE MAKING DELIVERIES SUBSTANTIALLY IN ACCORDANCE WITH THE SCHEDULES OF THEIR PRESENT CONTRACTS. THESE RECORDS ARE CURRENT THROUGH THE END OF MAY 1967.'

BASED ON THE FOREGOING, IT IS THE POSITION OF THE NSSC THAT THE IFB WAS CANCELLED FOR COMPELLING REASONS; THAT THE RESOLICITATION ON A NEGOTIATED BASIS FROM PRIOR PRODUCERS WAS NECESSARY TO MEET THE DELIVERY REQUIREMENTS FOR THE EQUIPMENT; THAT THE SHORT OPENING PERIOD FOR PROPOSALS OR OFFERS AND THE LACK OF SYNOPSIS IN THE COMMERCE BUSINESS DAILY WERE FULLY JUSTIFIED; AND THAT THE RESOLICITATION WAS AS COMPETITIVE AS WAS POSSIBLE IN THE CIRCUMSTANCES.

THE REPORTED FACTS, WHICH WE MUST ACCEPT AS CORRECT ABSENT EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THEIR CORRECTNESS, INDICATE THAT WHILE A RESPONSIVE, RESPONSIBLE NEW PRODUCER MIGHT HAVE MET THE BID B DELIVERY SCHEDULE SET FORTH IN THE IFB, IT WAS DETERMINED PRIOR TO ANY AWARD THEREUNDER THAT THE SCHEDULE ITSELF WOULD NOT SATISFY THE DEPARTMENT OF THE NAVY'S MINIMUM NEEDS, THE DETERMINATION OF WHICH IS PRIMARILY WITHIN THE PROVINCE OF THE DEPARTMENT. ACCORDINGLY, WHILE IT IS UNFORTUNATE THAT THE INADEQUACY OF THE BID B DELIVERY SCHEDULE WAS NOT DISCOVERED BEFORE THE IFB WAS ISSUED, OR AT LEAST BEFORE THE BIDS WERE OPENED AND THE PRICES DISCLOSED, THE RECORD NEVERTHELESS SUPPORTS THE ADMINISTRATIVE VIEW THAT THERE WAS AT LEAST ONE COMPELLING REASON FOR CANCELLING THE IFB. THEREFORE, WE ARE UNABLE TO SAY THAT THE CANCELLATION WAS NOT A PROPER EXERCISE OF ADMINISTRATIVE AUTHORITY UNDER ASPR 2-404.1. FURTHER, SINCE SUCH ACTION PRECLUDES ANY AWARD UNDER THE IFB, NO DECISION BY OUR OFFICE ON THE RESPONSIVENESS OF YOUR BID APPEARS TO BE REQUIRED. THE GOVERNMENT CANNOT BE OBLIGATED TO ACCEPT A BID BASED UPON TERMS WHICH DO NOT IN FACT MEET ITS NEEDS.

REGARDING THE USE OF NEGOTIATION ON RESOLICITATION RATHER THAN ADVERTISING UNDER ANOTHER IFB, YOU ARE ADVISED THAT 10 U.S.C. 2310 (B) ACCORDS FINALITY TO THE WRITTEN FINDING BY THE PERSON MAKING THE DECISION TO NEGOTIATE UNDER 10 U.S.C. 2304 (A) (10), THE FINDING BEING REQUIRED TO SET FORTH FACTS AND CIRCUMSTANCES WHICH CLEARLY AND CONVINCINGLY ESTABLISH THAT FORMAL ADVERTISING WOULD NOT HAVE BEEN FEASIBLE AND PRACTICABLE. THE RECORD BEFORE US, WE FIND NO ADEQUATE GROUND TO QUESTION THE SUFFICIENCY OF THE CONTRACTING OFFICER'S FINDINGS TO SUPPORT THE ACTION DECIDED UPON.

CONCERNING THE NSSC DECISION NOT TO PUBLICIZE THE NEGOTIATED SOLICITATION, ASPR 1-1003.1 (C) EXCEPTS FROM THE COMMERCE BUSINESS DAILY SYNOPSIS REQUIREMENT ANY PROCUREMENT (WHETHER ADVERTISED OR NEGOTIATED) WHICH IS OF SUCH URGENCY THAT THE GOVERNMENT WOULD BE SERIOUSLY INJURED BY THE DELAY INVOLVED IN PERMITTING THE DATE SET FOR RECEIPT OF BIDS, PROPOSALS OR QUOTATIONS TO BE MORE THAN 15 CALENDAR DAYS FROM THE DATE OF TRANSMITTAL OF THE SYNOPSIS OR THE DATE OF ISSUANCE OF THE SOLICITATION, WHICHEVER IS EARLIER. IN THE CIRCUMSTANCES OF THIS CASE, WHICH EVIDENCE A BONA FIDE NEED FOR DELIVERY WITHIN A STATED PERIOD THAT CAN BE MET ONLY BY AN AWARD TO A PRIOR PRODUCER NO LATER THAN JUNE 30, 1967, AND THAT THE ONLY CHANGE IN THE PROCUREMENT REQUIREMENTS ALREADY SET OUT IN THE EARLIER IFB RELATES TO SUCH DELIVERY REQUIREMENTS, IT IS OUR VIEW THAT SYNOPSIS WAS NOT REQUIRED AND THAT THE SAME FACTORS JUSTIFY THE SHORTENED PERIOD FOR SUBMISSION OF OFFERS UNDER THE NEGOTIATED SOLICITATION.

WITH RESPECT TO THE FACT THAT NEGOTIATIONS WERE LIMITED TO THE THREE PRIOR PRODUCERS, THE FACT THAT ONLY SUCH PRODUCERS CAN MEET THE REQUIRED DELIVERY SCHEDULE INDICATES THAT SOLICITATION OF OTHER SOURCES WOULD HAVE SERVED NO USEFUL PURPOSE. THIS CONCLUSION APPEARS TO BE SUPPORTED BY THE FACT THAT YOU DID NOT ELECT TO SUBMIT AN OFFER EVEN AFTER THE DEPARTMENT OF THE NAVY FURNISHED YOU WITH A COPY OF THE NEGOTIATED SOLICITATION AT YOUR REQUEST. SUCH CIRCUMSTANCES, IN OUR VIEW, INDICATE THAT THE DEPARTMENT OF THE NAVY MADE AN EFFORT TO OBTAIN THE MAXIMUM COMPETITION AVAILABLE AS CONTEMPLATED BY 10 U.S.C. 2304 (G) AND ASPR 3-102 (C).

AT THIS POINT, IT APPEARS PROPER TO POINT OUT THAT SINCE THE IFB HAD BEEN CANCELLED AND SINCE YOU DID NOT SUBMIT AN OFFER UNDER THE NEGOTIATED SOLICITATION, YOU WERE NOT A PROSPECTIVE CONTRACTOR AND, THEREFORE, THERE WAS NO NEED FOR THE DEPARTMENT OF THE NAVY TO MAKE ANY DETERMINATION REGARDING YOUR CAPABILITY TO PRODUCE THE EQUIPMENT IN QUESTION. ACCORDINGLY, WE SEE NO IMPROPRIETY IN THE DEPARTMENT'S RELUCTANCE TO CONSIDER EVIDENCE OF YOUR RESPONSIBILITY.

AS TO THE CAPABILITY OF THE THREE PRIOR PRODUCERS TO PERFORM THE PROPOSED CONTRACT, RESPONSIBILITY FOR DETERMINING THE RESPONSIBILITY OF THE PRODUCER WHO WILL BE SELECTED TO PERFORM THE CONTRACT IN QUESTION RESTS WITH THE DEPARTMENT OF THE NAVY IN THE FIRST INSTANCE, AND UNDER THE GENERAL RULE APPLICABLE TO SUCH MATTERS OUR OFFICE WILL NOT QUESTION THE ADMINISTRATIVE DETERMINATION WHICH ULTIMATELY WILL BE MADE, ABSENT EVIDENCE THAT SUCH DETERMINATION IS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUFFICIENT EVIDENCE. IT MAY BE STATED, HOWEVER, WITH RESPECT TO TELEDYNE AND STEWART-WARNER, THAT WHILE AN OFFEROR'S PERFORMANCE, INCLUDING HIS PAST PERFORMANCE RECORD, IS A FACTOR WHICH MUST BE CONSIDERED IN DETERMINING WHETHER HE IS RESPONSIBLE WITH RESPECT TO A PARTICULAR PROCUREMENT, THE INFORMATION OF RECORD AS SET FORTH ABOVE DOES NOT APPEAR TO WARRANT A NEGATIVE FINDING IN THIS REGARD AS TO EITHER PRODUCER. MAY ALSO BE STATED HERE THAT THE SUPERVISION OF CONTRACT PERFORMANCE IS UNDER THE JURISDICTION OF THE CONTRACTING AGENCY, NOT OUR OFFICE; THEREFORE, WE WILL NOT UNDERTAKE TO IMPOSE OUR JUDGMENT PROSPECTIVELY ON THE BASIS OF CERTAIN CONDITIONS WHICH MAY NEVER ARISE. 45 COMP. GEN. 742, 747.

WITH RESPECT TO YOUR CONTENTION THAT THE FAILURE OF THE DEPARTMENT OF THE NAVY TO CHANGE THE PRIORITY DESIGNATOR FOR THE MATERIALS TO BE USED IN PERFORMING THE CONTRACT INDICATES THAT THE NEED IS NOT URGENT, YOUR ATTENTION IS DIRECTED TO THE FACT THAT THE RECORD SHOWS THAT THERE IS A NEED TO HAVE DELIVERIES OF PRODUCTION QUANTITIES 14 MONTHS EARLIER THAN WAS REQUIRED BY THE BID B DELIVERY SCHEDULE IN THE IFB AND THAT SUCH NEED CAN BE MET SIMPLY BY MAKING AWARD TO A PRIOR PRODUCER WHO WILL NOT REQUIRE THE 16 MONTHS THAT WAS ORIGINALLY ALLOWED UNDER BID B FOR NEW PRODUCERS TO MEET FIRST ARTICLE TESTING REQUIREMENTS. IT WOULD APPEAR, THEREFORE, THAT THERE WAS NO NEED TO CHANGE THE PRIORITY DESIGNATOR. HOWEVER, SHOULD THE SUCCESSFUL OFFEROR ENCOUNTER DIFFICULTIES, AFTER AWARD, IN OBTAINING THE NECESSARY MATERIALS TO PERFORM THE CONTRACT, NO REASON APPEARS WHY THE CONTRACTING AGENCY SHOULD NOT LEND ITS ASSISTANCE TO THE EXTENT NECESSARY TO PROTECT THE GOVERNMENT'S INTERESTS.

FINALLY, ON THE RECORD BEFORE US, WE FIND NO EVIDENCE TO SUPPORT YOUR CONTENTION THAT THE DEPARTMENT OF THE NAVY IN MAKING ITS DECISION TO NEGOTIATE FOR THE PROCUREMENT OF THE EQUIPMENT IN QUESTION HAS NOT CONSIDERED THE AVAILABILITY OF THE UNITS BEING DELIVERED UNDER CURRENT CONTRACTS WITH TELEDYNE AND STEWART-WARNER AND THE PRACTICABILITY OF ADVERTISING FOR A PORTION OF THE PROCUREMENT NEED. CONVERSELY, THE INFORMATION FURNISHED BY THE DEPARTMENT INDICATES THAT IT HAS KEPT A CURRENT CHECK ON THE PRODUCTION AND DELIVERIES UNDER THE EXISTING CONTRACTS AND HAS MADE A CAREFUL REVIEW OF ITS NEEDS WHICH LED TO THE DECISION THAT NEGOTIATION FOR THE ENTIRE QUANTITY (MINUS THE OPTION INCLUDED IN THE IFB) IS NECESSARY TO FULFILL SUCH NEEDS. IN THE LIGHT OF THESE REPORTED FACTS, WE CANNOT REJECT THE NAVY'S CONCLUSION THAT THE DELIVERY AND OTHER REQUIREMENTS IN THE NEGOTIATED SOLICITATION ARE REALISTIC AND REPRESENT THE ACTUAL NEEDS OF THE SERVICE. ACCORDINGLY, WE SEE NO LEGAL BASIS FOR OBJECTION TO AN AWARD BEING MADE UNDER THE NEGOTIATED SOLICITATION IN ACCORDANCE WITH ESTABLISHED PROCEDURES.